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	$77,020		$98,590
Materials inventory, December 31	(a)		111,410
Materials purchased	195,630		(a)
Cost of direct materials used in production	206,410		(b)
Direct labor	290,370		221,830
Factory overhead	90,110		110,420
Total manufacturing costs incurred in December	(b)		637,880
Total manufacturing costs	734,770		875,480
Work in process inventory, December 1	147,880		237,600
Work in process inventory, December 31	124,770		(c)
Cost of goods manufactured	(c)		631,960
Finished goods inventory, December 1	130,160		110,420
Finished goods inventory, December 31	136,330		(d)
Sales	1,135,270		985,900
Cost of goods sold	(d)		637,880
Gross profit	(e)		(e)
Operating expenses	147,880		(f)
Net income	(f)		218,870

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.	$fill in the blank 562df8f89fa9077_1	$fill in the blank 562df8f89fa9077_2
b.	$fill in the blank 562df8f89fa9077_3	$fill in the blank 562df8f89fa9077_4
c.	$fill in the blank 562df8f89fa9077_5	$fill in the blank 562df8f89fa9077_6
d.	$fill in the blank 562df8f89fa9077_7	$fill in the blank 562df8f89fa9077_8
e.	$fill in the blank 562df8f89fa9077_9	$fill in the blank 562df8f89fa9077_10
f.	$fill in the blank 562df8f89fa9077_11	$fill in the blank 562df8f89fa9077_12

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 direct materials used	$_____
Less materials inventory, December 31	$_____
Cost of direct materials used		$_____
Direct labor		$_____
Factory overhead		$_____
Total manufacturing costs incurred			$_____
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 finished goods available for sale	$_____
Less finished goods inventory, December 31	$_____
Cost of goods sold		$_____
Gross profit		$_____
Operating expenses		$_____
Net income		$_____

Answer 1

1.

	On Company	Off Company
a	$195,630+$77,020-$206,410 = $66,240	305,630+111,410-98,590 = $318,450
b	$206,410+290,370+90,110 = $586,890	$637,880-110,420-221,830 = $305,630
c	$734,770-124,770 = $610,000	$875,480-631,960 = $243,520
d	$610,000+130,160-136,330 = $603,830	$631,960+$110,420-$637,880 = $104,500
e	$1,135,270-$603,830 = $531,440	$985,900-$637,800 = $348,100
f	$531,440-$147,880 = $383,560	$348,100-$218,870 = $129,230

2.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory, December 1			$147,880
Direct materials:
Materials inventory, December 1	$ 77,020
Purchases	$195,630
Direct material available for use	$272,650
Less materials inventory, December 31	$ 66,240
Cost of direct materials used		$206,410
Direct labor		$290,370
Factory overhead		$ 90,110
Total manufacturing costs incurred			$586,890
Total manufacturing costs			$734,770
Less work in process inventory, December 31			$124,770
Cost of goods manufactured			$610,000

3.

On Company
Income Statement
For the Month Ended December 31
Sales		$1,135,270
Cost of goods sold:
Finished goods inventory, December 1	$130,160
Cost of goods manufactured	$610,000
Cost of finished goods available for sale	$740,160
Less finished goods inventory, December 31	$136,330
Cost of goods sold		$   603,830
Gross profit		$   531,440
Operating expenses		$   147,880
Net income		$   383,560

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