Question

Top Sail manufactures sailboats.  The following selected financial information for the fiscal year 2016 is provided:
	Item	Amount
	Sales	$10,000,000
	Cost of Goods Manufactured	7,500,000
	Direct Material Purchased	4,000,000
	Factory Overhead	1,000,000
	Work in Process - January 1	3,000,000
	Work in Process - December 31	1,500,000
	Direct Material - December 31	1,000,000
	Finished Goods Inventory - December 31	6,000,000
	Net Income	1,500,000
	Direct Materials used	3,000,000
	Cost of Goods Sold	5,500,000
Use this information to prepared Top Sail's Income Statement for FY 2016. Include a detailed Cost of Goods Sold section within this income statement: (Answers should be entered in the proper format. Round dollar values & enter as whole dollars only.)

Answer 1

Statement Showing Net Income for the Financial Year 2016

	Particulars	Amount($)	Amount($)
A	Sales		100,00,000
B	Less:Cost of goods sold
	Direct Materials Used(40L-10L)	30,00,000
	Direct Labour	20,00,000
	Factory Overheads	10,00,000
	Add:Opening -work -in -Progress	30,00,000
	Less:Closing Work-in-progress	15,00,000
	Cost of Goods Manufactured	75,00,000
	Add:Beginning Inventory of finished Goods	40,00,000
	Less:Clsoing Inventory of finished Goods	60,00,000
	Cost of Goods Sold	55,00,000	55,00,000
	Gross Profit(A-B)		45,00,000
	Less:Operating Expenses		30,00,000
	Net Income		15,00,000