Question

In: Accounting

Advertising expense $22,250                                      

Advertising expense $22,250                                       Direct labor $564,500

Depreciation expense – Office Equip $10,440            Income taxes expense $138,700

Depreciation expense – Selling Equip. $ 12,125          Indirect labor $61,000

Depreciation expense – Factory Equip. $37,400          Misc. Production costs $10,400

Factory supervision $123,400                                       Office salaries expense $ 72,875

Factory supplies used (indirect materials) $8,060         Raw Materials purchased $896,375

Factory utilities $39,500                                                 Rent expense- office $25,625

INVENTORIES:                                                              Rent expense- selling space $29,000

Raw Materials, Dec 31, 2018 $42,375                            Rent expense- factory building $95,500

Raw Materials, Dec 31, 2019 $72,430                            Maintenance expense- factory $32,375

Goods-in-Process, Dec 31, 2018 $14,500                      Sales $5,002,000

Goods-in-Process, Dec 31, 2019 $16,100                      Sales discounts $59,375

Finished Goods, Dec 31, 2018 $179,200                       Sales salaries expense $297,300

Finished Goods, Dec 31, 2019 $143,750

  1. Prepare Income Statement

DATE

ACCOUNT NAMES

DEBIT

CREDIT

A

Raw Materials Inventory

             

     Accounts Payable

                    

B

Goods-in-Process Inventory

             

     Raw Materials Inventory

                    

C

Factory Payroll

          

     Cash

                 

D

Goods-in-Process Inventory

              

Factory Overhead

    Factory Payroll

E

Factory Overhead

    Accum. Dep., Factory

    Cash

F

Goods-in-Process Inventory

    Factory Overhead

G

Finished Goods Inventory

    Goods-in-Process Inventory

H

Cost of Goods Sold

    Finished Goods Inventory

I

Factory Overhead

    Cost of Goods Sold

  1. Prepare the following journal entries from the information in the table above. You may complete the journal entries first, then go back and finish filling in the T-accounts in requirement #4 if this helps you work through this problem.

    Record the following transactions:

    1. Purchases of raw materials inventory on account for the year.

    2. Assignment of materials costs to Goods-in-Process Inventory (all materials are

      considered direct).

    3. Payment of Factory Payroll in cash.

    4. Assignment of Factory Payroll to Goods-in-Process Inventory and Factory Overhead.

    5. Record all other Factory Overhead. Assume everything except Depreciation is paid

      in cash.

    6. Assignment of Factory Overhead to Goods-in-Process Inventory, assuming the

      company uses a POHR of 75%

    7. Transfer of goods completed to Finished Goods Inventory.

    8. Recording of Cost of Goods Sold.

    9. Make your adjusting entry for any over- or under-applied Factory Overhead.

Can you please just help me with the Income Statement Please.

Solutions

Expert Solution

Solution :

Income statement:

Income Statement
For the year ended Dec 31 2019
Particular Amount
Income
Sales $        5,002,000
Total A $        5,002,000
Expenses
Cost of good sold (See note 1) $            900,170
Direct Labor $            564,500
Indirect Labor $              61,000
Misc production cost $              10,400
Factory Supervision $            123,400
Factory utilites $              39,500
Factory supplies used (indirect materials) $                8,060
Maintenance expense- Factory $              32,375
Depreciation expense- Factory equip $              37,400
Advertising expense $              22,250
Depreciation expense- Office equip $              10,440
Depreciation expense- Selling equip $              12,125
Sales discounts $              59,375
Sales Salaries expenses $            297,300
Rent expense- Office $              25,625
Rent expense- Selling space $              29,000
Rent expense- factory building $              95,500
Office salaries expense $              72,875
Total B $        2,401,295
Income before taxes (A-B) $        2,600,705
Income tax expenses $            138,700
Income after taxes $        2,462,005

Working Notes:

1. Cost of Sales
Purchases made $896375
Add: Inventory as on Dec,31,2018
Raw Material $42375
Goods in process $14500
Finished goods $179200
Less: Inventory as on Dec,31, 2019 $72430
Goods in process $16100
Finished goods $143750
Cost of Goods sold    $900170   

ekkarill92 answered 1 year ago
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