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 May: Instructions 1. For both companies, determine the amounts of the missing items (a) through (f), identifying them by letter. 2. Prepare Yakima Company’s statement of cost of goods manufactured for May. 3. Prepare Yakima Company’s income statement for May.

Ascertain the amounts of the missing items, identifying them by letter.

Cost of goods manufactured: Cost of goods manufactured refers to the costs incurred for manufacturing the goods during the period. A statement of cost of goods manufactured is prepared in order to determine the cost of goods manufactured, which in turn is used to determine the cost of goods sold, and prepare the income statement.

Income statement: The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earning statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

Working notes:

1. 1.      Determine the amount (a) in Company R.

  Materials inventory, May 31 = [Materials inventory, May 1+Materialspurchased−Cost of directmaterials used in production ]=$100,000+$950,000−$938,500=$111,500 (a)

1. 2.      Determine the amount (a) in Company Y.

   (Cost of direct materialsused in production) = (Materials inventory, May 1+Materialspurchased−Materials inventory, May 31)=$48,200+$710,000−$50,000=$708,200 (a)

2. 3.      Determine the amount (b) in Company Y.

  Direct labor=(Total manufacturing costs incurred during May−Cost of mterials used in production−Factory overhead)=$2,484,200−$708,200−$446,000=$1,330,000 (b)

1. 4.      Determine the amount (b) in Company R.

   (Total manufacturing costsincurred during May)= (Cost of direct materials used in production+Direct labor+Factory overhead)=($938,500+$2,860,000+$1,800,000)=$5,598,500 (b)

2. 5.      Determine the amount (c) in Company Y.

   Work in progress, May 31 = [Total manufacturing costs−Cost of goods manufactured]=$2,660,600−$2,491,500=$169,100 (c)

3. 6.      Determine the amount (c) in Company R.

  Cost of goods manufactured = [Total manufacturing costs+Work in process, May1−Work in progress May 31]=[$5,598,500+$400,000−$382,000]=$5,616,500 (c)

1. 7

Prepare Company Y’s statement of cost of goods manufactured for May.

Prepare Company Y’s income statement for May.