Question

In: Accounting

Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several items are omitted from the income...

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

On
Company
Off
Company
Materials inventory, December 1 $74,800 $100,230
Materials inventory, December 31 (a) 113,260
Materials purchased 189,990 (a)
Cost of direct materials used in production 200,460 (b)
Direct labor 282,000 225,520
Factory overhead 87,520 112,260
Total manufacturing costs incurred in December (b) 648,490
Total manufacturing costs 713,600 890,040
Work in process inventory, December 1 143,620 241,550
Work in process inventory, December 31 121,180 (c)
Cost of goods manufactured (c) 642,470
Finished goods inventory, December 1 126,410 112,260
Finished goods inventory, December 31 132,400 (d)
Sales 1,102,550 1,002,300
Cost of goods sold (d) 648,490
Gross profit (e) (e)
Operating expenses 143,620 (f)
Net income (f) 222,510

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter On Company Off Company
a. $ $
b. $ $
c. $ $
d. $ $
e. $ $
f. $ $

2. Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
$
Direct materials:
$
$
$
Total manufacturing costs incurred during December
Total manufacturing costs $
$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
$
Cost of goods sold:
$
$
$
$

Solutions

Expert Solution

1.
On Company
a) Materials inventory, December 31 = $74800+189990-200460 = $64330
b) Total Manufacturing Costs = $200460+282000+87520 = $569980
c) Cost of Goods Manufactured = $569980+143620-121180 = $592420
d) Cost of Goods Sold = $592420+126410-132400 = $586430
e) Gross Profit = $1102550-586430 = $516120
f) Net Income = $516120-143620 = $372500

Off Company
a) Materials Purchased = $310710+113620-100230 = $324100
b) Cost of Direct Material Used = $648490-225520-112260 = $310710
c) Work in process inventory, December 31 = $890040-642470 = $247570
d) Finished goods inventory, December 31 = $642470+112260-648490 = $106240
e) Gross Profit = $1002300-648490 = $353810
f) Operating Expenses = $353810-222510 = $131300

2.

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory $          74,800
Add: Purchases $        189,990
Total Raw Material Available $        264,790
Deduct : Raw Material in inventory, ending $          64,330
Raw Material used in production $     200,460
Direct Labor $     282,000
Manufacturing Overhead $       87,520
Total Manufacturing Costs $     569,980
Add: Beginning Work in Process Inventory $     143,620
$     713,600
Deduct: Ending Work in Process Inventory $     121,180
Cost of Goods Manufactured $    592,420

3.

Income Statement
Sales Revenue $ 1,102,550
Cost of Goods Sold
Finished Goods Inventory, Beginning $        126,410
Add: Cost of Goods Manufactured $        592,420
Cost of Goods Available for sale $        718,830
Deduct : Finished Goods Inventory, Ending $        132,400
Cost of goods sold $    586,430
Gross Profit $     516,120
Operating Expenses $     143,620
Net Income (Loss) $    372,500

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