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Income Statement and Supporting Schedules. The following financial information is for Caravelli Company. (Note that the...

Income Statement and Supporting Schedules. The following financial information is for Caravelli Company. (Note that the most current financial information is presented in the first column.)

December 31, 2016 December 31, 2015
Raw materials inventory $ 24,000 $ 30,000
Work-in-process inventory 1,800,000 1,650,000
Finished goods inventory 1,050,000 1,230,000

Of the total raw materials placed in production for the year, $36,000 was for indirect materials. The company had $3,795,000 in sales for the year ended December 31, 2016. The company also had the following costs for the year:

Selling $ 270,000
General and administrative $ 720,000
Raw materials purchases $ 300,000
Direct labor used in production $ 375,000
Manufacturing overhead $1,890,000

Required:

  1. Prepare a schedule of raw materials placed in production for the year ended December 31, 2016.

  2. Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016.

  3. Prepare a schedule of cost of goods sold for the year ended December 31, 2016.

  4. Prepare an income statement for the year ended December 31, 2016.

  5. Describe the three types of costs included in cost of goods sold on the income statement. (Dollar amounts are not necessary in your descriptions.)

Solutions

Expert Solution

Preparation of a schedule of raw material placed in production for the year ended December 31, 2016 -

Preparation of a schedule of cost of goods manufactured for the year ended December 31,2016:

Preparation of a schedule of cost of goods sold for the year ended December 31, 2016 -

Cost of goods sold = cost of goods manufactured + beginning FG - Ending FG

= 2421000 + 1230000 - 1050000

= 2601000

Preparation of an Income statement for the year ended December 31, 2016

Answer to next question:

Three types of costs included in cost of goods sold on income statement Raw material cost,labor cost, manufacturing cost.

or variable cost, fixed cost, semivariable cost.

Please check with your answer and let me know.

ekkarill92 answered 2 years ago
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