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	$61,480		$83,610
Materials inventory, December 31	(a)		94,480
Materials purchased	156,160		(a)
Cost of direct materials used in production	164,770		(b)
Direct labor	231,780		188,120
Factory overhead	71,930		93,640
Total manufacturing costs incurred in December	(b)		540,960
Total manufacturing costs	586,520		742,460
Work in process inventory, December 1	118,040		201,500
Work in process inventory, December 31	99,600		(c)
Cost of goods manufactured	(c)		535,940
Finished goods inventory, December 1	103,900		93,640
Finished goods inventory, December 31	108,820		(d)
Sales	906,220		836,100
Cost of goods sold	(d)		540,960
Gross profit	(e)		(e)
Operating expenses	118,040		(f)
Net income	(f)		185,610

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
Work in process inventory, December 1			$
Direct materials:
Materials inventory, December 1	$
Purchases
Cost of materials available for use	$
Less materials inventory, December 31
Cost of direct materials used in production		$
Direct labor
Factory overhead
Total manufacturing costs incurred during December
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

letter		On		Off
		Company		Company
a.		52,870		270,070
b.		468,480		259,200
c.		486,920		206,520
d.		482,000		88,620
e.		424,220		295,140
f.		306,180		109,530

Cost of goods manufactured (On company)
Work in process inventory,december 1							118,040
Raw materials inventory,December 1					61,480
materials purchased					156,160
cost of raw materials available for use					217,640
Raw materials inventory,December 31					52,870
Cost of direct materials used in production						164,770
Direct labor						231,780
Factory overhead						71,930
Total manufacturing cost incurred in December							468,480
Total manufacturing cost							586,520
work in process inventory ,December 31							99,600
cost of goods manufactured							486,920

sales							906,220
Cost of goods sold
Finished goods inventory,December 1						103,900
cost of goods manufactured						486,920
cost of goods available for sale						590,820
Finished goods inventory,December 31						108,820
Cost of goods sold							482,000
Gross profit							424,220
less operating expense							118,040
net income							306,180

working (off company)

Cost of goods manufactured (Off company)
Work in process inventory,december 1							201,500
Raw materials inventory,December 1					83,610
materials purchased					270,070
cost of raw materials available for use					353,680
Raw materials inventory,December 31					94,480
Cost of direct materials used in production						259,200
Direct labor						188,120
Factory overhead						93,640
Total manufacturing cost incurred in December							540,960
Total manufacturing cost							742,460
work in process inventory ,December 31							206,520
cost of goods manufactured							535,940
Cost of goods sold
Finished goods inventory,December 1						93,640
cost of goods manufactured						535,940
cost of goods available for sale						629,580
Finished goods inventory,December 31						88,620
Cost of goods sold						540,960
income statement
sales						836,100
less cost of goods sold						540,960
Gross profit						295,140
less operating expense						109,530
net income						185,610