InventoriesDecember 31January 1$ 77,350$ 95,550MaterialsWork in processFinished goods109,20096,200113,750100,100$ 68,250Advertising expenseDepreciation expense-office equipmentDepreciation expense-factory equipment22,75014,560Direct labor186,550Heat, light, and power-factory5,850Indirect labor23,660Materials purchased123,500Office salaries expense77,350Property taxes-factoryProperty taxes-headquarters buildingRent expense-factory4,09513,6506,825Sales864,500Sales salaries expense136,500Supplies-factoryMiscellaneous costs-factory3,2504,420

Question
Asked Jan 15, 2020
1 views

The following information is available for Shanika Company for 20Y6:

Please see the attachment

Instructions
1. Prepare the statement of cost of goods manufactured.
2. Prepare the income statement.

Inventories
December 31
January 1
$ 77,350
$ 95,550
Materials
Work in process
Finished goods
109,200
96,200
113,750
100,100
$ 68,250
Advertising expense
Depreciation expense-office equipment
Depreciation expense-factory equipment
22,750
14,560
Direct labor
186,550
Heat, light, and power-factory
5,850
Indirect labor
23,660
Materials purchased
123,500
Office salaries expense
77,350
Property taxes-factory
Property taxes-headquarters building
Rent expense-factory
4,095
13,650
6,825
Sales
864,500
Sales salaries expense
136,500
Supplies-factory
Miscellaneous costs-factory
3,250
4,420
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Inventories December 31 January 1 $ 77,350 $ 95,550 Materials Work in process Finished goods 109,200 96,200 113,750 100,100 $ 68,250 Advertising expense Depreciation expense-office equipment Depreciation expense-factory equipment 22,750 14,560 Direct labor 186,550 Heat, light, and power-factory 5,850 Indirect labor 23,660 Materials purchased 123,500 Office salaries expense 77,350 Property taxes-factory Property taxes-headquarters building Rent expense-factory 4,095 13,650 6,825 Sales 864,500 Sales salaries expense 136,500 Supplies-factory Miscellaneous costs-factory 3,250 4,420

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Expert Answer

Step 1

Cost of goods manufactured: 

Cost of goods manufactured refers to the cost incurred for a making a product, that are available for sales at the end of the accounting period.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Accounting homework question answer, step 1, image 1
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Step 2

(a)

Company S
Statement of cost of goods manufactured
For the year ended December 31, 20Y6
Particulars$$$
Work in progress inventory, January 1, 20Y8  1,09,200
Direct materials:   
       Materials inventory, January 1, 20Y677,350  
       Purchases1,23,500  
       Cost of  materials available for use2,00,850  
Less: Materials inventory, December 31, 20Y695,550  
      Cost of direct materials used 1,05,300 
      Direct labor 1,86,550 
Factory overhead:   
      Indirect labor23,660  
      Depreciation expense -factory equipment14,560  
      Heat, light, and power -factory5,850  
      Property taxes -factory 4,095  
     Rent expense - factory6,825  
     Supplies – factory3,250  
     Miscellaneous costs -factory4,420  
    Total factory overheads 62,660 
Total manufacturing costs incurred during January  3,54,515
      Total manufacturing costs  4,63,710
Less: work in process inventory, December 31, 20Y6  96,200
Cost of goods manufactured  3,67,510

To Prepare: The statement of cost of goods manufactured.

...
Accounting homework question answer, step 2, image 1
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