Question

ersailles Manufacturing Company had the following ledger account balances at 30 June 2017. Balance Finished Goods?1...

ersailles Manufacturing Company had the following ledger account balances at 30 June 2017.

Balance

Finished Goods?1 July2006

$43,500

Work in Process?1 July2006

19,375

Raw Materials1? July2006

8,950

Prepaid Factory Rent

180,000

Factory Rent

72,000

Sales

3,131,500

Direct Labour

224,000

Raw Materials Purchases

412 500

Indirect Labour

83,400

Factory Supplies

16,535

Electricity and Gas

94,375

Factory Insurance

18,690

Selling & Distribution Expenses

73,000

Administrative Expenses

116,500

Machinery Depreciation

185,000

Interest Expense

14,000

Additional information relating to the company is as follows: 1. The inventories as of 30 June 2017 were:

Raw materials 11,450

Work in process 19,745

Finished goods 18,900

Expenses incurred as at the end of the year but not yet recorded are: direct labour $6,000 and administrative expenses, $3,500.

On 1 January 2017 the company paid $180,000 for the next 12 months factory rent and recorded this amount in Prepaid Factory Rent Account.

Required:

(a) Prepare costs of goods manufactured statement for 2017.

(b) Prepare income statement for the year ended 30 June 2017.

Business   Accounting   
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Homework Answers

Answer #1
Schedule cost of Goods manufactured:
Beginning Inventory of WIP 19375
Material used
Beginning Inventory of material 8950
Add: Purchases 412500
Total cost of material available for sale 421450
Less: Ending inventory of material 11450
Cost of Material consumed 410000
Direct labour 230000
Mannufacturing overheads
Factory rent (90000+72000) 162000
Indirect labour 83400
factory supplies 16535
Electricity and gasa 94375
factory insurance 18690
machinery depreciation 185000 560000
Total manufacturing cost 1,200,000
Total cost of Goods manufacturing 1219375
Less: Ending inventory of WIP 19745
Cost of Goods manufactured 1199630
Income Statement:
Sales r evenue 3131500
Less: Cost of Goods sold
Beginning FG inventroy 43500
Add: Cost of Goods manufactured 1199630
Total cost of goods available for sale 1243130
Less: Ending FG inventory 18900
Cost of Good ssold 1224230
Ggross Margin 1907270
Lless: Selling and admin expense
Selling and distribution exxpense 73000
Admin expense (116500+3500) 120000
Interest expensse 14000
Net Income 1700270
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