Question

The following information is available for Shanika Company for 20Y6:

Inventories	January 1		December 31
Materials	$206,620		$252,080
Work in process	371,920		342,830
Finished goods	357,450		350,390

Advertising expense	$171,160
Depreciation expense-office equipment	24,200
Depreciation expense-factory equipment	32,520
Direct labor	388,200
Heat, light, and power-factory	12,860
Indirect labor	45,370
Materials purchased	380,640
Office salaries expense	132,850
Property taxes-factory	10,590
Property taxes-headquarters building	21,930
Rent expense-factory	17,900
Sales	1,782,210
Sales salaries expense	218,810
Supplies-factory	8,820
Miscellaneous costs-factory	5,550

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Work in process inventory, January 1, 20Y6 ______
Direct materials:________
Materials inventory, January 1, 20Y6 ________
Purchases _________
Cost of materials available for use _______
Materials inventory, December 31, 20Y6 ________
Cost of direct materials used in production ________
Direct labor _________
Factory overhead:__________
Indirect labor _________
Depreciation expense-factory equipment _________
Heat, light, and power-factory ___________
Property taxes-factory _________
Rent expense-factory ___________
Supplies-factory __________
Miscellaneous costs-factory _________
Total factory overhead_________
Total manufacturing costs incurred in 20Y6_________
Total manufacturing costs_________
Work in process inventory, December 31, 20Y6 _________
Cost of goods manufactured_________ 2. Prepare the 20Y6 income statement. Shanika Company Income Statement For the Year Ended December 31, 20Y6 Sales ________ Cost of good sold:_________ Finished goods inventory, January 1, 20Y6 _______ Cost of goods manufactured ________ Cost of finished goods available for sale ________ Finished goods inventory, December 31, 20Y6 _________ Cost of goods sold __________ Gross profit __________ Operating expenses:_______ Administrative expenses:_________ Office salaries expense_________ Depreciation expense-office equipment _________ Property taxes-headquarters building __________ Selling expenses:__________ Advertising expense ________ Sales salaries expense ___________ Total operating expenses__________ Net income __________

Answer 1

1.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
Work in process inventory, January 1, 20Y6			371920
Direct materials:
Materials inventory, January 1, 20Y6	206620
Purchases	380640
Cost of materials available for use	587260
Materials inventory, December 31, 20Y6	252080
Cost of direct materials used in production		335180
Direct labor		388200
Factory overhead:
Indirect labor	45370
Depreciation expense-factory equipment	32520
Heat, light, and power-factory	12860
Property taxes-factory	10590
Rent expense-factory	17900
Supplies-factory	8820
Miscellaneous costs-factory	5550
Total factory overhead		133610
Total manufacturing costs incurred in 20Y6			856990
Total manufacturing costs			1228910
Work in process inventory, December 31, 20Y6			342830
Cost of goods manufactured			886080

2.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
Sales			1782210
Cost of goods sold:
Finished goods inventory, January 1, 20Y6		357450
Cost of goods manufactured		886080
Cost of finished goods available for sale		1243530
Finished goods inventory, December 31, 20Y6		350390
Cost of goods sold			893140
Gross profit			889070
Operating expenses:
Administrative expenses:
Office salaries expense	132850
Depreciation expense-office equipment	24200
Property taxes-headquarters building	21930	178980
Selling expenses:
Advertising expense	171160
Sales salaries expense	218810	389970
Total operating expenses			568950
Net income			320120