Question

X Company had the following inventory balances for 20x1.
Inventory Classification		January 1, 20x1		December 31, 20x1
Raw material		$55,000		$75,000
Work in process		110,000		125,000
Finished goods		0		152,000
During 20x1, the company purchased raw material	262,500
and spent	384,500	for direct labor.
Manufacturing overhead costs were as follows:
Indirect material	$12,000
Indirect labor	22,000
Depreciation on plant and equipment	110,000
Utilities	23,000
Other	42,000
Total	$209,000
For the year, sales revenue was	$1,215,000
Selling and administrative expenses for the year was		$106,000.00
The firm’s tax rate is	36	percent.
Round your answers to the nearest dollar. Fill in the blank without $ or comma or period, e.g., 12345
How much net income did X Company report on it's income statement for 20X1?

Answer 1

Statement of Cost of Goods Manufactured
Direct materials:
Beginning Inventory	55000
Add: Purchases	262500
Materials available	317500
Less: Ending inventory	75000
Direct materials used in production		242500
Direct labor		384500
Overhead		209000
Total production (manufacturing) costs added		836000
Add: BWIP		110000
Less: EWIP		125000
Cost of goods manufactured		821000

Statement of Cost of Goods Sold
Cost of goods manufactured	821000
Add: Beginning finished goods	0
Goods available for sale	821000
Less: Ending finished goods	152000
Cost of goods sold	669000

Sales	1215000
Less: Cost of goods sold	669000
Gross Margin	546000
Less: Selling and adm. expenses	106000
Income before tax	440000
Less: Tax (36%)	158400
Net Income	281600