Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):

Selling expenses	$	215,000
Purchases of raw materials	$	266,000
Direct labor		?
Administrative expenses	$	153,000
Manufacturing overhead applied to work in process	$	370,000
Actual manufacturing overhead cost	$	359,000

Inventory balances at the beginning and end of the year were as follows:

	Beginning of Year			End of Year
Raw materials	$	50,000		$	36,000
Work in process		?		$	31,000
Finished goods	$	33,000			?

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $33,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold.

Required:

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

NEED HELP FILLING IN BLANK SPACES IN ALL BELOW

1. Prepare an income statement for the year.

Superior Company
Income Statement
Sales
Cost of goods sold
Gross margin		0
Selling and administrative expenses:
Selling expenses	$215,000
Administrative expenses	153,000
		368,000
Net operating income		$33,000

2. Prepare a schedule of cost of goods sold.

Superior Company
Schedule of Cost of Goods Sold
Beginning finished goods inventory	$33,000
Add: Cost of goods manufactured
Cost of goods available for sale	725,000
Less: Ending finished goods inventory	60,000
Unadjusted cost of goods sold	665,000
Adjusted cost of goods sold

3.Prepare a schedule of cost of goods sold.

Superior Company
Schedule of Cost of Goods Sold
Beginning finished goods inventory	$33,000
Add: Cost of goods manufactured
Cost of goods available for sale	725,000
Less: Ending finished goods inventory	60,000
Unadjusted cost of goods sold	665,000
Adjusted cost of goods sold

Answer 1

	Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	50000
Add: Purchases of raw materials	266000
Total raw materials available	316000
Deduct: Raw materials inventory, ending	36000
Raw materials used in production		280000
Direct labor		25000	=675000-280000-370000
Manufacturing overhead applied to work in process inventory		370000
Total manufacturing costs		675000
Add: Beginning work in process inventory		48000
		723000
Deduct: Ending work in process inventory		31000
Cost of goods manufactured		692000
	Schedule of Cost of Goods Sold
Finished goods inventory, beginning		33000
Add: Cost of goods manufactured		692000
Cost of goods available for sale		725000
Deduct: Finished goods inventory, ending		60000
Unadjusted cost of goods sold		665000
Less: Overapplied overhead		11000	=370000-359000
Adjusted cost of goods sold		654000
	Income Statement
Sales		1055000	=401000+654000
Cost of goods sold		654000
Gross margin .		401000	=33000+368000
Selling and administrative expenses:
Selling expenses	215000
Administrative expense	153000	368000
Net operating income		33000