Question

Indicate the missing amount for each letter.

Direct Matl Usd	9720	$ g
Direct Labor	5520	8650
Mfg Overhead	8490	4540
Total Mfg Cost	a	16720
Beg Work in progress Inv	1180	h
End work in progress Inv	$ b	3360
Sales Rev	25090	i
Sales Disc	2740	2180
COG Manufactured	17650	22220
Beg Finished Goods Inv	c	4150
Goods Available for sale	22560	i
COGS	d	k
End finished goods inv	3910	3200
gross Profit	e	7820
Operating Exp	3080	l
Net Income	f	6060

Prepare a condensed cost of goods manufactured schedule for Case 1.

Prepare an income statement for Case 1.

Prepare the current assets section of the balance sheet for Case 1. Assume that in Case 1 the other items in the current assets section are as follows: Cash $3,870, Receivables (net) $15,490, Raw Materials $710, and Prepaid Expenses $460. (List Current Assets in order of liquidity.)

Answer 1

Answer 1.

Case 1:

Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead
Total manufacturing costs = $9,720 + $5,520 + $8,490
Total manufacturing costs = $23,730

Cost of goods manufactured = Beginning work in progress inventory + Total manufacturing costs – Ending work in progress inventory
$17,650 = $1,180 + $23,730 - Ending work in progress inventory
Ending work in progress inventory = $7,260

Cost of goods available for sale = Beginning finished goods inventory + Cost of goods manufactured
$22,560 = Beginning finished goods inventory + $17,650
Beginning finished goods inventory = $4,910

Cost of goods sold = Cost of goods available for sale - Ending finished goods inventory
Cost of goods sold = $22,560 - $3,910
Cost of goods sold = $18,650

Net sales = Sales revenue - Sales discount
Net sales = $25,090 - $2,740
Net sales = $22,350

Gross profit = Net sales - Cost of goods sold
Gross profit = $22,350 - $18,650
Gross profit = $3,700

Net income = Gross profit - Operating expenses
Net income = $3,700 - $3,080
Net income = $620

Case 2:

Total manufacturing costs = Direct materials used + Direct labor + Manufacturing overhead
$16,720 = Direct materials used + $8,650 + $4,540
Direct materials used = $3,530

Cost of goods manufactured = Beginning work in progress inventory + Total manufacturing costs – Ending work in progress inventory
$22,220 = Beginning work in progress inventory + $16,720 - $3,360
Beginning work in progress inventory = $8,860

Cost of goods available for sale = Beginning finished goods inventory + Cost of goods manufactured
Cost of goods available for sale = $4,150 + $22,220
Cost of goods available for sale = $26,370

Cost of goods sold = Cost of goods available for sale - Ending finished goods inventory
Cost of goods sold = $26,370 - $3,200
Cost of goods sold = $23,170

Net income = Gross profit - Operating expenses
$6,060 = $7,820 - Operating expenses
Operating expenses = $1,760

Gross profit = Net sales - Cost of goods sold
$7,820 = Net sales - $23,170
Net sales = $30,990

Net sales = Sales revenue - Sales discount
$30,990 = Sales revenue - $2,180
Sales revenue = $33,170

Answer 2.