Question

5.

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

	On Company		Off Company
Materials inventory, December 1	$73,370		$97,580
Materials inventory, December 31	(a)		110,270
Materials purchased	186,360		(a)
Cost of direct materials used in production	196,630		(b)
Direct labor	276,600		219,560
Factory overhead	85,840		109,290
Total manufacturing costs incurred in December	(b)		631,340
Total manufacturing costs	699,940		866,510
Work in process inventory, December 1	140,870		235,170
Work in process inventory, December 31	118,860		(c)
Cost of goods manufactured	(c)		625,490
Finished goods inventory, December 1	124,000		109,290
Finished goods inventory, December 31	129,860		(d)
Sales	1,081,470		975,800
Cost of goods sold	(d)		631,340
Gross profit	(e)		(e)
Operating expenses	140,870		(f)
Net income	(f)		216,630

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	On Company	Off Company
a.	$	$
b.	$	$
c.	$	$
d.	$	$
e.	$	$
f.	$	$

2. Prepare On Company's statement of cost of goods manufactured for December.

On Company
Statement of Cost of Goods Manufactured
For the Month Ended December 31
			$
Direct materials:
	$
	$
		$
Total manufacturing costs incurred during December
Total manufacturing costs			$
			$

3. Prepare On Company's income statement for December.

On Company
Income Statement
For the Month Ended December 31
		$
Cost of goods sold:
	$
	$
		$
		$

Answer 1

2)	Cost of goods manufactured (On company)
	Work in process inventory,december 1							140,870
	Raw materials inventory,December 1					73,370
	materials purchased					186,360
	cost of raw materials available for use					259,730
	Raw materials inventory,December 31					63,100
	Cost of direct materials used in production						196,630
	Direct labor						276,600
	Factory overhead						85,840
	Total manufacturing cost incurred in December							559,070
	Total manufacturing cost							699,940
	work in process inventory ,December 31							118,860
	cost of goods manufactured							581,080
3)	Cost of goods sold
	Finished goods inventory,December 1						124,000
	cost of goods manufactured						581,080
	cost of goods available for sale						705,080
	Finished goods inventory,December 31						129,860
	Cost of goods sold						575,220
	income statement
	sales						1,081,470
	less cost of goods sold						575,220
	Gross profit						506,250
	less operating expense						140,870
	net income						365,380
	Cost of goods manufactured (Off company)
	Work in process inventory,december 1							235,170
	Raw materials inventory,December 1					97,580
	materials purchased					315,180
	cost of raw materials available for use					412,760
	Raw materials inventory,December 31					110,270
	Cost of direct materials used in production						302,490
	Direct labor						219,560
	Factory overhead						109,290
	Total manufacturing cost incurred in December							631,340
	Total manufacturing cost							866,510
	work in process inventory ,December 31							241,020
	cost of goods manufactured							625,490
	Cost of goods sold
	Finished goods inventory,December 1						109,290
	cost of goods manufactured						625,490
	cost of goods available for sale						734,780
	Finished goods inventory,December 31						103,440
	Cost of goods sold						631,340
	income statement
	sales						975,800
	less cost of goods sold						631,340
	Gross profit						344,460
	less operating expense						127,830
	net income						216,630
1)	letter		On		Off
			Company		Company
	a.		63,100		315,180
	b.		559,070		302,490
	c.		581,080		241,020
	d.		575,220		103,440
	e.		506,250		344,460
	f.		365,380		127,830

sales							1,081,470
Cost of goods sold
Finished goods inventory,December 1						124,000
cost of goods manufactured						581,080
cost of goods available for sale						705,080
Finished goods inventory,December 31						129,860
Cost of goods sold							575,220
Gross profit							506,250
less operating expense							140,870
net income							365,380