Chapter 18, Problem 4BTN

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

Multi step income statement:

There are two ways to present and income stamen: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

1. Direct Material used
2. Factory overhead
3. Total Manufacturing costs
4. Total Cost of work in process
5. Cost of goods manufactured

Answer to Problem 4BTN

1. Direct Material used = $881,875
2. Factory overhead = 383,125
3. Total Manufacturing costs = $1,915,750
4. Total Cost of work in process= $1,931,625
5. Cost of goods manufactured= $1,917,625

Explanation of Solution

The above amounts are calculated as follows:

Raw Material Purchases (A)	$ 872,500
Raw Materials, beginning (B)	$ 177,500
Raw Materials, Ending (C)	$ 168,125
Direct Material used (D)= (A+B-C)		$ 881,875
Direct labor (E)		$ 650,750
Factory overhead:
Depreciation expense-Factory equipment	$32,500
Factory Supervision	$ 122,500
Factory Supplies used	$15,750
Factory Utilities	$36,250
Indirect labor	$60,000
Misc. Production Costs	$ 8,500
Rent Expense-Factory Building	$79,750
Maintenance expense- Factory equipment	$27,875
Total Factory Overhead (F)		$ 383,125
Total Manufacturing costs (G) = (D+E+F)		$ 1,915,750
Work in process, beginning (H)		$15,875
Total Cost of Work in Process (I) =(G+H)		$ 1,931,625
Work in process, ending (J)		$14,000
Cost of Goods Manufactured (K) = (I-J)		$ 1,917,625

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

Multi step income statement:

There are two ways to present and income stamen: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-1:

1. Direct Material used
2. Factory overhead
3. Total Manufacturing costs
4. Total Cost of work in process
5. Cost of goods manufactured

Answer to Problem 4BTN

1. Direct Material used = $881,875
2. Factory overhead = 383,125
3. Total Manufacturing costs = $1,915,750
4. Total Cost of work in process= $1,931,625
5. Cost of goods manufactured= $1,917,625

Explanation of Solution

The above amounts are calculated as follows:

Raw Material Purchases (A)	$ 872,500
Raw Materials, beginning (B)	$ 177,500
Raw Materials, Ending (C)	$ 168,125
Direct Material used (D)= (A+B-C)		$ 881,875
Direct labor (E)		$ 650,750
Factory overhead:
Depreciation expense-Factory equipment	$32,500
Factory Supervision	$ 122,500
Factory Supplies used	$15,750
Factory Utilities	$36,250
Indirect labor	$60,000
Misc. Production Costs	$ 8,500
Rent Expense-Factory Building	$79,750
Maintenance expense- Factory equipment	$27,875
Total Factory Overhead (F)		$ 383,125
Total Manufacturing costs (G) = (D+E+F)		$ 1,915,750
Work in process, beginning (H)		$15,875
Total Cost of Work in Process (I) =(G+H)		$ 1,931,625
Work in process, ending (J)		$14,000
Cost of Goods Manufactured (K) = (I-J)		$ 1,917,625

To determine

Concept Introduction:

Income Statement:

Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.

Multi step income statement:

There are two ways to present and income stamen: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items.

Requirement-3:

1. Net Sales
2. Cost of Goods Sold
3. Gross Profit
4. Total Operating expenses
5. Net income or loss before tax

Answer to Problem 4BTN

1. Net Sales =$3,217,500
2. Cost of Goods Sold =$1,953,000
3. Gross Profit = $1,264,500
4. Total Operating expenses =$471,875
5. Net income or loss before tax =$792,625

Explanation of Solution

The above amounts are calculated as follows:

Sales	$ 3,275,000
Less: Sales Discount	$57,500
Net Sales (X)		$ 3,217,500
Raw Material Purchases (A)	$ 872,500
Raw Materials, beginning (B)	$ 177,500
Raw Materials, Ending (C)	$ 168,125
Direct Material used (D)= (A+B-C)		$ 881,875
Direct labor (E)		$ 650,750
Factory overhead:
Depreciation expense-Factory equipment	$32,500
Factory Supervision	$ 122,500
Factory Supplies used	$15,750
Factory Utilities	$36,250
Indirect labor	$60,000
Misc. Production Costs	$ 8,500
Rent Expense-Factory Building	$79,750
Maintenance expense- Factory equipment	$27,875
Total Factory Overhead (F)		$ 383,125
Total Manufacturing costs (G) = (D+E+F)		$ 1,915,750
Work in process, beginning (H)		$15,875
Total Cost of Work in Process (I) =(G+H)		$ 1,931,625
Work in process, ending (J)		$14,000
Cost of Goods Manufactured (K) = (I-J)		$ 1,917,625
Finished Goods, beginning (L)		$ 164,375
Finished Goods, ending (M)		$ 129,000
Cost of Goods sold (N) = (K+L-M)		$ 1,953,000
Gross Profit (O) = (X-N)		$ 1,264,500
Operating Expenses:
Advertising expense	$19,125
Depreciation expense-office equipment	$ 8,750
Depreciation expense-Selling equipment	$10,000
Office Salaries expense	$ 100,875
Rent Expense-Office space	$21,125
Rent Expense-Selling space	$25,750
Sales Salaries expense	$ 286,250
Total Operating Expenses		$ 471,875
Net income before taxes		$ 792,625