Question

The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.

Advertising expense	$	32,700		Direct labor	$	690,400
Depreciation expense—Office equipment		11,500		Income taxes expense		286,200
Depreciation expense—Selling equipment		10,700		Indirect labor		57,500
Depreciation expense—Factory equipment		32,800		Miscellaneous production costs		9,400
Factory supervision		112,700		Office salaries expense		63,000
Factory supplies used		8,300		Raw materials purchases		965,000
Factory utilities		31,000		Rent expense—Office space		20,000
Inventories				Rent expense—Selling space		26,800
Raw materials, December 31, 2016		167,000		Rent expense—Factory building		80,100
Raw materials, December 31, 2017		189,000		Maintenance expense—Factory equipment		35,700
Work in process, December 31, 2016		15,600		Sales		4,526,600
Work in process, December 31, 2017		23,500		Sales salaries expense		398,200
Finished goods, December 31, 2016		163,800
Finished goods, December 31, 2017		137,400
Required: 1. Prepare the company’s 2017 schedule of cost of goods manufactured. LEONE COMPANY Schedule of Cost of Goods Manufactured For Year Ended December 31, 2017 Direct materials Raw materials available for use Direct materials used Factory overhead Total factory overhead costs Total manufacturing costs Total cost of work in process Cost of goods manufactured Required: 2. Prepare the company’s 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses. LEONE COMPANY Income Statement For Year Ended December 31, 2017 Cost of goods sold Goods available for sale Cost of goods sold Operating expenses Selling expenses Total selling expenses General and administrative expenses Total general and administrative expenses Total operating expenses Income before taxes Net income

Answer 1