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Questions 9-10 (of 10)> Save & Problem 14-3A Schedule of cost of goods manufactu

ID: 2330018 • Letter: Q

Question

Questions 9-10 (of 10)> Save & Problem 14-3A Schedule of cost of goods manufactured and income statement i nventory analysis LO P2, A1 The following information applies to the questions displayed below. The following calendar year-end information is taken from the December 31, 2015, adjusted trial balance and other records of Leone Company. Advertising expense $ 28.750 Direct labor $ 675.480 233 725 56,875 8.425 63000 925000 22000 26,100 76.800 35.400 equipment 7,250 Income taxes expense 8,600 Indirect labor Depreciation expense-Selling equipment Depreciation expense-Factory equipment Factory Factory supplies used 33,550 102.600 Miscellaneous production costs Office salaries exp Raw materials purchases 7.350 33.000 Rent expens Factory utilities Inventories Raw materials, December 31. 2014 Raw materiels, December 31, 2015 Work in process. Dece Work in process. December 31, 2015 Finished goods, Rent expens space 166.850 Rent expense-Fectory building 182 000 Mantenance expense-Factory equipment 15.700 Sales 19.380 r 31, 2014 3 Sales salares expense 392.560 31, 2014 31 2015

Explanation / Answer

LEONE COMPANY

Manufacturing Statement

For Year Ended December 31, 2015

Direct materials

Raw materials inventory, December 31, 2014

166850

Raw materials purchases

925000

Raw materials available for use

1091850

Less: Raw materials inventory, December 31, 2015

182000

Direct materials used

909850

Direct labor

675480

Factory overhead:

Factory supervision

102600

Factory supplies used

7350

Factory utilities

33000

Maintenance expense—Factory equipment

35400

Rent expense—Factory building

76800

Depreciation expense—Factory equipment

33550

Indirect labor

56875

Miscellaneous production costs

8425

Total factory overhead costs

354000

Total manufacturing costs

1939330

Add: Goods in process inventory, December 31, 2014

15700

Total cost of goods in process

1955030

Less: Goods in process inventory, December 31, 2015

19380

Cost of goods manufactured

1935650

LEONE COMPANY

Income Statement

For Year Ended December 31, 2015

Sales

4462500

Cost of goods sold

Cost of goods manufactured

1,935,650

Finished goods inventory, December 31, 2014

167,350

Goods available for sale

2,103,000

Less: Finished goods inventory, December 31, 2015

136,490

Cost of goods sold

1,966,510

Gross profit from sales

2,495,990

Operating expenses

Selling expenses

Depreciation expense—Selling equipment

8,600

Rent expense—Selling space

26,100

Sales salaries expense

392,560

Advertising expense

28,750

Total selling expenses

456,010

General and administrative expenses

Rent expense—Office space

22,000

Office salaries expense

63,000

Depreciation expense—Office equipment

7,250

Total general and administrative expenses

92,250

Total operating expenses

548,260

Income before state and federal taxes

1,947,730

Income taxes expense

233,725

Net income

LEONE COMPANY

Manufacturing Statement

For Year Ended December 31, 2015

Direct materials

Raw materials inventory, December 31, 2014

166850

Raw materials purchases

925000

Raw materials available for use

1091850

Less: Raw materials inventory, December 31, 2015

182000

Direct materials used

909850

Direct labor

675480

Factory overhead:

Factory supervision

102600

Factory supplies used

7350

Factory utilities

33000

Maintenance expense—Factory equipment

35400

Rent expense—Factory building

76800

Depreciation expense—Factory equipment

33550

Indirect labor

56875

Miscellaneous production costs

8425

Total factory overhead costs

354000

Total manufacturing costs

1939330

Add: Goods in process inventory, December 31, 2014

15700

Total cost of goods in process

1955030

Less: Goods in process inventory, December 31, 2015

19380

Cost of goods manufactured

1935650

LEONE COMPANY

Income Statement

For Year Ended December 31, 2015

Sales

4462500

Cost of goods sold

Cost of goods manufactured

1,935,650

Finished goods inventory, December 31, 2014

167,350

Goods available for sale

2,103,000

Less: Finished goods inventory, December 31, 2015

136,490

Cost of goods sold

1,966,510

Gross profit from sales

2,495,990

Operating expenses

Selling expenses

Depreciation expense—Selling equipment

8,600

Rent expense—Selling space

26,100

Sales salaries expense

392,560

Advertising expense

28,750

Total selling expenses

456,010

General and administrative expenses

Rent expense—Office space

22,000

Office salaries expense

63,000

Depreciation expense—Office equipment

7,250

Total general and administrative expenses

92,250

Total operating expenses

548,260

Income before state and federal taxes

1,947,730

Income taxes expense

233,725

Net income

1,714,005