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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Statement of cost of goods manufactured and income statement for a manufacturing company

The following information is available for Robstown Corporation for 20Y8:

Inventories January 1 December 31
Materials $ 44,250 $ 31,700
Work in process 63,900 80,000
Finished goods 101,200 99,800
Advertising expense $ 400,000
Depreciation expense—office equipment 30,000
Depreciation expense—factory equipment 80,000
Direct labor 1.100,000
Heat, light, and power—factory 53,300
Indirect labor 115,000
Materials purchased 556,600
Office salaries expense $ 318,000
Property taxes—factory 40,000
Property taxes—office building 25,000
Rent expense—factory 27,000
Sales 3.850,000
Sales salaries expense 200,000
Supplies—factory 0,500
Miscellaneous costs—factory 11,400

Instructions

1. Prepare the statement of cost of goods manufactured.

2. Prepare the income statement.

(a)

To determine

Cost of goods manufactured:

Cost of goods manufactured refers to the cost incurred for making a product that is 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.

To Prepare: The statement of cost of goods manufactured.

Explanation

The cost of goods manufactured is determined as follows:

Corporation R

Statement of cost of goods manufactured

For the year ended December 31, 20Y8

Particulars$$$
Work in progress inventory, January 1, 20Y8  63,900
Direct materials:   
       Materials inventory, January 1, 20Y844,250  
       Purchases556,600  
       Cost of  materials available for use600,850  
Less: Materials inventory, December 31, 20Y831,700  
      Cost of direct materials used 569,150 
      Direct labor 1,100,000 
Factory overhead:   

(b)

To determine

To Prepare: The income statement.

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