Question

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 $58,780 $79,940 Materials inventory, December 31 (a) 90,330 Materials purchased 149,300 (a) Cost of direct materials used in production 157,530 (b) Direct labor 221,600 179,870 Factory overhead 68,770 89,530 Total manufacturing costs incurred in December (b) 517,210 Total manufacturing costs 560,760 709,870 Work in process inventory, December 1 112,860 192,660 Work in process inventory, December 31 95,220 (c) Cost of goods manufactured (c) 512,420 Finished goods inventory, December 1 99,340 89,530 Finished goods inventory, December 31 104,040 (d) Sales 866,420 799,400 Cost of goods sold (d) 517,210 Gross profit (e) (e) Operating expenses 112,860 (f) Net income (f) 177,470 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 Work in process inventory, December 1 $ Direct materials: Materials inventory, December 1 $ Purchases Cost of materials available for use $ Less materials inventory, December 31 Cost of direct materials used in production $ Direct labor Factory overhead Total manufacturing costs incurred during December Total manufacturing costs $ Less work in process inventory, December 31 Cost of goods manufactured $ 3. Prepare On Company's income statement for December. On Company Income Statement For the Month Ended December 31 Sales $ Cost of goods sold: Finished goods inventory, December 1 $ Cost of goods manufactured Cost of materials available for use $ Less finished goods inventory, December 31 Cost of goods sold Gross profit $ Operating expenses Net income $

Answer 1

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

Solution-

Letter	Grant Company	McClellan Company
a.	$63,560 ($73,900+$187,710-$198,050)	$203,670 ($96,070+$216,160-$108,560)
b.	$563,110 ($198,050+$278,600+$86,460)	$310,300 ($621,570-$203,670-$107,600)
c.	$585,280 ($563,110+$141,890-$119,720)	$237,290 ($853,100-$615,810)
d.	$579,370 ($124,890+$585,280-$130,800	$101,840 ($615,810+$107,600-$621,570)
e.	$509,920 ($1,089,290-$579,370)	$339,130 ($960,700-$621,570)
f.	$368,030 ($$509,920-$141,890)	$125,850 ($339,130 -$213,280)

2. Prepare McClellan Company's statement of cost of goods manufactured for December. Enter all amounts as positive numbers.

Solution-

McClellan Company Statement of Cost of Goods Manufactured For the Month Ended December 31, 2014
Work in process inventory, December 1, 2014			$ 231,530
Direct materials:
Materials inventory, December 1, 2014	$96,070
Purchases	$216,160
Cost of materials available for use	$312,230
Less materials inventory, December 31, 2014	$108,560
Cost of direct materials used in production		$203,670
Direct labor		$310,300
Factory overhead		$107,600
Total manufacturing costs incurred during December			$621,570
Total manufacturing costs			$853,100
Less-Work in process inventory, December 31, 2014			$237,290
Cost of goods manufactured			$615,810

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

Solution-

McClellan Company Income Statement For the Month Ended December 31, 2014
Sales		$ 960,700
Cost of goods sold:
Finished goods inventory, December 1, 2014	$ 107,600
Cost of goods manufactured	$ 615,810
Cost of finished goods available for sale	$723,410
Less-Finished goods inventory, December 31, 2014	$101,840
Cost of goods sold		$621,570
Gross profit		$339,130
Operating expenses		$125,850
Net Income		$213,280