Question

In: Accounting

The following selected account balances are provided for Delray Mfg. Sales $ 1,265,000 Raw materials inventory,...

The following selected account balances are provided for Delray Mfg.

Sales $ 1,265,000
Raw materials inventory, beginning 36,000
Work in process inventory, beginning 59,100
Finished goods inventory, beginning 62,100
Raw materials purchases 180,600
Direct labor 241,000
Factory supplies used (indirect materials) 19,500
Indirect labor 53,000
Repairs—Factory equipment 5,250
Rent cost of factory building 57,000
Advertising expense 94,000
General and administrative expenses 140,000
Raw materials inventory, ending 44,700
Work in process inventory, ending 45,900
Finished goods inventory, ending 68,100

Prepare an income statement for Delray Mfg. (a manufacturer).

Solutions

Expert Solution

INCOME STATEMENT

DELRAY MFG.
INCOME STATEMENT
FOR THE YEAR ENDED XXXX
Sales        1,265,000
Cost of Goods Sold
Finished goods inventory at the beginning                   62,100
Cost of goods manufactured (see schedule)                560,850
Cost of goods available for sale                622,950
Less: Finished goods inventory at the end (68,100)
Cost of goods sold 554,850
Gross Profit 710,150
Operating Expenses
General and administrative expenses                140,000
Advertising Expense                   94,000
Total Operating Expenses           234,000
Net Income           476,150

SCHEDULE OF COST OF GOODS MANUFACTURED

DELRAY MFG.
COST OF GOODS MANUFACTURED
FOR THE YEAR ENDED XXXX
Direct Materials
Direct Materials Inventory at the beginning            36,000
Direct Material Purchase        180,600
Cost of direct materials available for use        216,600
Less: Direct materials inventory at the end (44,700)
Cost of direct materials placed in production       171,900
Direct labor        241,000
Factory Overhead
Indirect labor            53,000
Factory supplies used            19,500
Repairs-Factory Equipment              5,250
Rent Expenses of Factory Building            57,000
Total Factory Overheads        134,750
Total Manufacturing cost        547,650
Add: Work in process inventory at the beginning            59,100
Total work in process during the period        606,750
Less: Work in process inventory at the end (45,900)
Cost of Goods Manufactured        560,850

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