Question

The following selected account balances are provided for Delray Mfg.

Sales	$	1,472,000
Raw materials inventory, beginning		36,000
Work in process inventory, beginning		57,200
Finished goods inventory, beginning		68,000
Raw materials purchases		176,300
Direct labor		238,000
Factory supplies used (indirect materials)		21,600
Indirect labor		55,000
Repairs—Factory equipment		5,250
Rent cost of factory building		53,000
Advertising expense		98,000
General and administrative expenses		140,000
Raw materials inventory, ending		48,000
Work in process inventory, ending		45,200
Finished goods inventory, ending		65,100

Prepare an income statement for Delray Mfg. (a manufacturer).

DELRAY MFG.
Income Statement
For Year Ended December 31, Year 1
Sales		$1,472,000
Cost of goods sold
Finished goods inventory, beginning	$68,000
Cost of goods manufactured
Cost of goods available for sale	68,000
Cost of goods sold		68,000
		1,404,000
Operating expenses
Total operating expenses		0
Operating income		$1,404,000

Answer 1