Question

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.

Raw Materials Inventory 7/1/19		$50,000		Factory Insurance		$5,400
Raw Materials Inventory 6/30/20		47,300		Factory Machinery Depreciation		18,600
Finished Goods Inventory 7/1/19		97,800		Factory Utilities		31,000
Finished Goods Inventory 6/30/20		24,800		Office Utilities Expense		9,450
Work in Process Inventory 7/1/19		22,900		Sales Revenue		560,200
Work in Process Inventory 6/30/20		24,500		Sales Discounts		4,400
Direct Labor		144,850		Plant Manager’s Salary		65,600
Indirect Labor		25,160		Factory Property Taxes		9,810
Accounts Receivable		27,300		Factory Repairs		1,500
				Raw Materials Purchases		96,900
				Cash		41,500

Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)

Prepare an income statement through gross profit.

Prepare the current assets section of the balance sheet at June 30, 2020. (List Current Assets in order of liquidity.)

Answer 1

Preparing Schedule for Cost of Goods Manufactured:-

Clarkson Company

Schedule For Cost of Goods Manufactured

For the Year Ended June 30,2020

Description	Amount	Amount
Raw Materials Inventory (7/1/19)	$50,000
Add:- Raw Materials Purchases	96,900
Cost of Raw Materials Available for Use	$146,900
Less:- Raw Materials Inventory (6/30/20)	(47,300)
Cost of Raw Materials Used		$99,600
Direct Labor		$144,850
Manufacturing Costs:-
Indirect Labor	$25,160
Factory Insurance	5,400
Factory Machine Depreciation	18,600
Factory Utilities	31,000
Plant Manager Salary	65,600
Factory Property Taxes	9,810
Factory Repairs	1,500
Total Manufacturing Costs		$150,070
Total Manufacturing Overhead		$401,520
Add:- Work in Process Inventory (7/1/19)		22,900
Less:- Work in Process Inventory (6/30/20)		(24,500)
Cost of Goods Manufactured		$399,920

Also Preparing Schedule for Cost of Goods Sold:-

Clarkson Company

Schedule For Cost of Goods Sold

For the Year Ended June 30,2020

Description	Amount
Cost of Goods Manufactured	$399,920
Add:- Finished Goods Inventory (7/1/19)	97,800
Cost of Goods Available for Sale	$497,720
Less:- Finished Goods Inventory (6/30/20)	(24,800)
Cost of Goods Sold	$472,920

Preparing Income Statement:-

Clarkson Company

Income Statement

For the Year Ended June 30,2020

Accounts	Amount	Amount
Sales Revenue	$560,200
Less:- Sales Discounts	(4,400)
Net Sales	$555,800
Less:- Cost of Goods Sold	(472,920)
Gross Profit		$82,880
Operating Expenses:-
Office Utilities Expense	$9,450
Total Operating Expenses		($9,450)
Net Income		$73,430

Preparing Current Assets section of Balance Sheet:-

Clarkson Company

Balance Sheet (Partial)

June 30,2020

Assets	Amount	Amount
Current Assets:-
Cash	$41,500
Accounts Receivable	27,300
Inventories:-
Raw Materials Inventory (6/30/20)	$47,300
Work in Process Inventory (6/30/20)	24,500
Finished Goods Inventory (6/30/20)	24,800
Total Current Assets		$165,400