Question

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

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

Inventories	January 1	December 31
Materials	$296,600	$364,820
Work in process	533,880	496,160
Finished goods	513,120	507,100
Advertising expense		$247,710
Depreciation expense-office equipment		35,020
Depreciation expense-factory equipment		47,060
Direct labor		561,820
Heat, light, and power-factory		18,610
Indirect labor		65,670
Materials purchased		550,880
Office salaries expense		192,260
Property taxes-factory		15,320
Property taxes-headquarters building		31,740
Rent expense-factory		25,900
Sales		2,579,280
Sales salaries expense		316,660
Supplies-factory		12,770
Miscellaneous costs-factory		8,030

Required:

1. Prepare the statement of cost of goods manufactured.

Shanika Company
Statement of Cost of Goods Manufactured
For the Year Ended December 31, 20Y6
			$
Direct materials:
	$
	$
		$
Factory overhead:
	$
Total factory overhead
Total manufacturing costs incurred
Total manufacturing costs			$
Cost of goods manufactured			$

2. Prepare the income statement.

Shanika Company
Income Statement
For the Year Ended December 31, 20Y6
			$
Cost of goods sold:
		$
		$
			$
Operating expenses:
Administrative expenses:
	$
		$
Selling expenses:
	$
Total operating expenses
			$

Answer 1

1.

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$       296,600
Add: Purchases	$       550,880
Total Raw Material Available	$       847,480
Deduct : Raw Material in inventory, ending	$       364,820
Raw Material used in production		$       482,660
Direct Labor		$       561,820
Manufacturing Overhead
Depreciation expense-factory equipment	$          47,060
Heat, light, and power-factory	$          18,610
Indirect Labor	$          65,670
Property taxes-factory	$          15,320
Rent expense-factory	$          25,900
Supplies-factory	$          12,770
Miscellaneous costs-factory	$            8,030	$       193,360
Total Manufacturing Costs		$    1,237,840
Add: Beginning Work in Process Inventory		$       533,880
		$    1,771,720
Deduct: Ending Work in Process Inventory		$       496,160
Cost of Goods Manufactured		$   1,275,560

2

Income Statement (Multi Step)
Net Sales Revenue		$    2,579,280
Cost of Goods Sold
Beginning Finished Goods Inventory	$       513,120
Cost of Goods Manufactured	$    1,275,560
Cost of Goods Available for Sale	$    1,788,680
Less : Ending Finished Goods Inventory	$       507,100
Cost of Goods Sold		$    1,281,580
Gross Profit		$   1,297,700
Operating Expenses
Selling Expenses
Advertising Expense	$       247,710
Sales Salaries Expense	$       316,660
Total Selling Expenses		$       564,370
Administrative Expenses
Depreciation Expense-office equipment	$          35,020
Office salaries expense	$       192,260
Property taxes-headquarters building	$          31,740
Total Administrative Expenses		$       259,020
Total Operating Expenses		$       823,390
Net Operating Income		$       474,310