Question

BlueScope Steel Limited, an Australian flat product steel producer, closes its books and prepares financial statements at the end of each month.  The statement of cost of goods sold for September follows:
	BlueScope Steel Limited
	Statement of Cost of Goods Sold
	For the Month Ended September 30
	Beginning Finished Goods Inventory				$                      50,000
	Cost of goods manufactured				790,000
	Cost of goods available for sale				840,000
	Less: Ending Finished Goods Inventory				247,000
	Cost of goods sold				$                    593,000
Additional Information:
•   Of the utilities, 80 percent relates to manufacturing the steel; the remaining 20 percent      relates to the sales and administrative function.
•   All rent is for the office building.
•   Property taxes are assessed on the manufacturing plant.
•   Of the insurance, 60 percent is related to manufacturing the steel, the remaining 40      percent is related to the sales and administrative functions.
•   The company manufactured 7,825 tons of steel during September.
			7,825
The inventory balances at October 31, follow:
	Materials inventory				$                      23,000
	Work-in-Process Inventory				$                    220,000
	Finished goods Inventory				$                    175,000
Depreciation expense includes the following:
	Manufacturing plant				$                      20,000
	Manufacturing equipment				$                      30,000
	Office equipment				$                         4,000
					$                      54,000
BlueScope is subject to 30% company tax.
	30%
	BlueScope Steel Limited
	Pre-closing Account Balances
	October 31.
	Cash and Marketable securities					54,000
	Accounts and notes receivable					210,000
	Property, plant, and equipment (net)					1,140,000
	Accounts, notes, and taxes payable					70,000
	Bonds Payable					582,000
	Paid-in capital					100,000
	Retained earnings					930,000
	Sales					1,488,000
	Cost of goods sold					1,112,000
	Purchases of direct materials					510,000
	Total Manufacturing Cost					1,100,000
	Direct Labor					260,000
	Indirect factory labor					90,000
	Office salaries					122,000
	Sales salaries					42,000
	Utilities					135,000
	Rent					9,000
	Property tax					60,000
	Insurance					20,000
	Depreciation					54,000
	Office supplies expense					6,000
REQUIRED:
A.     Prepare a Schedule of Cost of Goods Manufactured for October.
B.     Prepare a Schedule of Cost of Goods Sold for October.
C.     Prepare an Income Statement for the month of October.

Answer 1

SOLUTION.

A, B & C: