Question

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December 2016:

1		Prius Company	Volt Company
2	Materials inventory, December 1	$280,280.00	$179,000.00
3	Materials inventory, December 31	(a)	177,500.00
4	Materials purchased	712,000.00	340,000.00
5	Cost of direct materials used in production	752,000.00	(a)
6	Direct labor	1,059,600.00	(b)
7	Factory overhead	325,200.00	179,600.00
8	Total manufacturing costs incurred during December	(b)	1,035,000.00
9	Total manufacturing costs	2,676,800.00	1,479,500.00
10	Work in process inventory, December 1	540,000.00	444,500.00
11	Work in process inventory, December 31	451,400.00	(c)
12	Cost of goods manufactured	(c)	1,027,500.00
13	Finished goods inventory, December 1	478,400.00	201,000.00
14	Finished goods inventory, December 31	495,200.00	(d)
15	Sales	4,143,000.00	1,676,500.00
16	Cost of goods sold	(d)	1,053,500.00
17	Gross profit	(e)	(e)
18	Operating expenses	540,000.00	(f)
19	Net income	(f)	383,000.00

	Required:
A.	Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
B.	Prepare Volt Company’s statement of cost of goods manufactured for December.*
C.	Prepare Volt Company’s income statement for December.* * Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Amount Descriptions Cost of direct materials used in production Cost of finished goods available for sale Cost of goods manufactured Cost of goods sold Cost of materials available for use Direct Labor Factory overhead Finished goods inventory, December 1, 2016 Finished goods inventory, December 31, 2016 Gross profit Materials inventory, December 1, 2016 Materials inventory, December 31, 2016 Net income Operating expenses Purchases Sales Total manufacturing costs incurred during December Work in process inventory, December 1, 2016 Work in process inventory, December 31, 2016 A. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers. Letter Prius Company Volt Company a. b. c. d. e. f. B. Prepare Volt Company’s statement of cost of goods manufactured for December. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Volt Company Statement of Cost of Goods Manufactured For the Month Ended December 31, 2016 1 2 Direct materials: 3 4 5 6 7 8 9 10 11 Total manufacturing costs 12 13 C. Prepare Volt Company’s income statement for December. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Volt Company Income Statement For the Month Ended December 31, 2016 1 2 Cost of goods sold: 3 4 5 6 7 8 9 10

Answer 1

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1
		Pirus Company		Vold Company
		Working	Answer	Working	Answer
2	Material Inventory December 1		280280		179000
3	Material Inventory December 31	a. 2+5-4	240280		177500
4	Material Purchased		712000		340000
5	Cost of Direct Material Used inproduction		752000	a. Opening+Pur-Closing 179000+340000-177500	341500
6	Direct Labor		1059600		513900
7	Factory Overhead		325200	b. 8-5-6	179600
8	Total Manufacturing Cost incurred during December	b 5+6+7	2136800		1035000
9	Total Manufacturing Cost		2676800		1479500
10	WIP Inventory December 1		540000		444500
11	WIP Inventory December 31		451400	C. 12-11	452000
12	Cost of Goods Manufactured	c. 9-11	2225400		1027500
13	Finished Goods Inventory December 1		478400		201000
14	Finished GOods Inventory December 31		495200	d. 12+13-16	175000
15	Sales		4143000		1676500
16	Cost of goods Sold	d. 12+13-14	2208600		1053500
17	Gross Profit	e. 15-16	1934400	e. 15-16	623000
18	Operating Expense		540000	f. 17-19	240000
19	Net Income	f. 17-18	1394400		383000
2	Cost of Goods Manufactured
	Direct Material Cost
	-Beginning Inventory	179000
	-Purchases	340000
	-Closing Inventory	-177500
	Direct Material Used		341500
	Direct Labor Cost		513900
	Factory Overhead		179600
	Manufacturing Cost incured During December		1035000
	Add: Beginning Work in process		444500
	Total Manufacturing Cost		1479500
	Less: Ending Work in process		452000
	Cost of Goods Manufactured		1027500
3	Income Statement
	Sales		1676500
	Cost of Goods Sold:
	-Beginning Finished Goods	201000
	-Cost of Goods manufactured	1027500
	-Ending Finished Goods	-175000
	Less ;Cost of Goods Sold		1053500
	Gross Margin		623000
	Less: Operating Expense		240000
	Operating Income		383000