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	$66,040		$89,810
Materials inventory, December 31	(a)		101,490
Materials purchased	167,740		(a)
Cost of direct materials used in production	176,990		(b)
Direct labor	248,970		202,070
Factory overhead	77,270		100,590
Total manufacturing costs incurred in December	(b)		581,070
Total manufacturing costs	630,030		797,510
Work in process inventory, December 1	126,800		216,440
Work in process inventory, December 31	106,980		(c)
Cost of goods manufactured	(c)		575,680
Finished goods inventory, December 1	111,610		100,590
Finished goods inventory, December 31	116,890		(d)
Sales	973,430		898,100
Cost of goods sold	(d)		581,070
Gross profit	(e)		(e)
Operating expenses	126,800		(f)
Net income	(f)		199,380

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
			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

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

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

1.

Letter	On Company	Off Company
a.	56790	290090	(278410 + 101490 - 89810)
b.	503230	278410	(581070 -202070 - 100590)
c.	523050	221830	(797510 - 575680)
d.	517770	95200	(100590 + 575680 - 581070)
e.	455660	317030	(898100 - 581070)
f.	328860	117650	(317030 - 199380)

Note: For On Company, please see 2 and 3 for the calculations. For Off Company, calculations shown in the next column.

2.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
Work in process inventory, December 1			126800
Direct materials:
Materials inventory, December 1	66040
Materials purchased	167740
Cost of direct materials available	233780
Less materials inventory, December 31	56790
Cost of direct materials placed in production		176990
Direct labor		248970
Factory overhead		77270
Total manufacturing costs incurred during December			503230
Total manufacturing costs			630030
Less work in process inventory, December 31			106980
Cost of goods manufactured $			523050

3.

On Company
Income Statement
For the Month Ended December 31
Sales		973430
Cost of goods sold:
Finished goods inventory, December 1	111610
Add cost of goods manufactured	523050
Cost of goods available for sale	634660
Less finished goods inventory, December 31	116890
Cost of goods sold		517770
Gross profit		455660
Operating expenses		126800
Net income		328860