Problem 3 (Textbook Re ference: P2-3)- Prepare statement of costs of goods manuf

Question

Problem 3 (Textbook Re ference: P2-3)- Prepare statement of costs of goods manufactured and an income statement you to sort through the records and prepare a statement of the company's cost of goods manufactured. You find the following data from oud vibrations, Inc., produces recordings of musical performances, A newly hired executive of the company has asked records prepared by Good Vibrations, Ine, for the year ended December 31, 2013: Inventories Beginning Direct Materials Inventory, January 1, 2013S 6,000 Ending Direct Materials Inventory, December, 31, 2013 $10,500 Beginning Work in Process Inventory, January 1, 2013 $10,000 Ending Work in Process Inventory, December 1, 2013 9,500 S50,000 $40,000 $15,000 7,000 S 5,000 $14,000 $10,500 $25,000 $76,500 Materials Purchases Direct Labor MOH Indireet Labor Mou Factory Utilities Expense MO Factory Supplies Expense MOR Depreciation Expense-Factory Building OH Depreciation Expense-Factory Equipment MOH Other Manufacturing Overhead MoHApphied Manuficturing Overhead You also learm that Beginning Finished Goods Inventory on Jamuary 1, 2013, was $20,000 and Ending Finished Goods Inventory on December 31, 2013, was $5,000. Sales for the year were $400,000. Selling expenses were $50,000 and administrative expenses were $75,000. Required: Prepare a statement of cost of goods manufactured for Good Vibrations, Inc., for the year ended December 31, 2013. (Hint: Use the space below to recreate the T-Account Template we made together in class) Prepare an income statement for Good Vibrations, Inc., for the year ended December 31, 2013. a. b. "Templates for (o) and (b) have been provided on the next page. Finished Goods Inventor Ba Leer 177, se CoGs CO GS 177, 5 Appl Fall 2018 -Due Thursday, September 6 EB 177%

Explanation / Answer

Solution a:

Solution b:

Good Vibrations Inc. Statement of cost of goods manufactured For the year ended December 31, 2013 Particulars Amount Direct materials: Material inventory, January 1 $6,000.00 Add: Material purchases $50,000.00 Materials available for use $56,000.00 Less: Materials inventory, December 31 $10,500.00 Materials used in production $45,500.00 Direct labor $40,000.00 Manufacturing overhead: Applied manufacturing overhead $76,500.00 Cost to manufacture $162,000.00 Add: Work in process inventory, Jan 1 $10,000.00 Less: Work in process inventory, Dec 31 $9,500.00 Cost of goods manufactured $162,500.00

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