Question

The following selected account balances are provided for Delray Mfg.

Sales	$	1,453,000
Raw materials inventory, Dec. 31, 2016		44,000
Work in process inventory, Dec. 31, 2016		53,500
Finished goods inventory, Dec. 31, 2016		68,500
Raw materials purchases		181,000
Direct labor		248,000
Factory computer supplies used		24,800
Indirect labor		56,000
Repairs—Factory equipment		5,250
Rent cost of factory building		56,000
Advertising expense		91,000
General and administrative expenses		143,000
Raw materials inventory, Dec. 31, 2017		46,100
Work in process inventory, Dec. 31, 2017		45,000
Finished goods inventory, Dec. 31, 2017		73,200

Prepare an income statement for Delray Mfg. (a manufacturer

Answer 1

Delray Mfg
Income Statement
For the Year ended December 31 2017
Sales Revenue		$    14,53,000.00
Cost of Goods sold
Beginning Finished Goods Inventory	$        68,500.00
Cost of Goods Manufactured	$    5,77,450.00
Goods available for sale	$    6,45,950.00
Less :Ending Finished goods Inventory	$        73,200.00
Cost of Goods sold		$        5,72,750.00
Gross Margin		$        8,80,250.00
Operating Expenses
general and administrative expenses	$    1,43,000.00
Advertising expenses	$        91,000.00
Total Operating expenses		$        2,34,000.00
Operating Profit		$        6,46,250.00

Working note

Delray Mfg
Cost of Goods Manufactured
For the Year ended December 31 2017
Direct Material
Raw material Inventory Beginning	$        44,000.00
Raw material Purchased	$    1,81,000.00
Raw material available for use	$    2,25,000.00
Less: Raw material Inventory Ending	$        46,100.00
Direct Material Used		$        1,78,900.00
Direct labor		$        2,48,000.00
Manufacturing Overheads
Factory computer supplies used	$        24,800.00
Indirect labor	$        56,000.00
Repair Factory Equipment	$         5,250.00
Rent cost of factory building	$        56,000.00
Total Manufacturing Overheads		$        1,42,050.00
Total manufacturing Cost		$        5,68,950.00
Add: Work in process Beginning		$           53,500.00
Less: Work in process Ending		$           45,000.00
Cost of Goods Manufactured		$        5,77,450.00