The following information applies to the questions displayed below. The followin
ID: 2333704 • Letter: T
Question
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 $ 28,750 Direct labor Advertising expense Depreciation expense-Office equipment Depreciation expense-Selling equipment Depreciation expenseFactory equipment Factory supervision Factory supplies used Factory utilities Inventories Raw materials, December 31, 2014 Raw materials, December 31, 2015 Work in process, December 31, 2014 Work in process, December 31, 2015 Finished goods, December 31, 2014 Finished goods, December 31, 2015 $ 675,480 233,725 56,875 8,425 63,000 925,000 22,000 26,100 76,800 35,400 4,462,500 392,560 7,250 8,600 33,550 102,600 7,350 33,000 Income taxes expense Indirect labor Miscellaneous production costs Office salaries expense Raw materials purchases Rent expense-Office space Rent expense-Selling space Rent expense-Factory building Maintenance expense-Factory equipment 166,850 182,000 15,700 Sales 19,380 Sales salaries expense 167,350 136,490Explanation / Answer
LEONE COMPANY
Income Statement
For the year ended December 31st 2015
Sales
$ 4,462,500.00
Cost of Goods Sold
Beginning Finished Goods Inventory
$ 167,350.00
Cost of goods Manufactured
$1,260,170.00
Goods Available for sale
$1,427,520.00
Less: Ending Finished Goods Inventory
$ 136,490.00
Cost of Goods Sold
$ 1,291,030.00
Gross Profit from Sales
$ 3,171,470.00
Operating Expenses
Selling Expenses
Advertisement Expenses
$ 28,750.00
Depreciation-Selling Equipment
$ 8,600.00
Rent-Selling Space
$ 26,100.00
Sales Salaries expenses
$ 392,560.00
Total selling Expenses
$ 456,010.00
General And Administrative Expenses
Depreciation-Office Equipment
$ 7,250.00
Office Salaries Expenses
$ 63,000.00
Rent Expenses-Office Space
$ 22,000.00
Total General and Administrative Expenses
$ 92,250.00
Total Operating expenses
$ 548,260.00
Income Before Taxes
$ 2,623,210.00
Income Taxes Expenses
$ 233,725.00
Net Income
$ 2,389,485.00
Working note – Cost of Goods manufactured
LEONE COMPANY
Cost of Goods Manufactured
For year ended December 31 2015
Direct Material
Raw material Inventory December 31 2014
$ 166,850.00
Raw material Purchased
$ 925,000.00
Raw material available for use
$ 1,091,850.00
Less: Raw material Inventory December 31 2015
$ 182,000.00
Direct Material Used
$ 909,850.00
Direct labor
Factory Overheads
Factory Supervision
$ 102,600.00
factory Supplies Used
$ 7,350.00
Indirect labor
$ 56,875.00
Rent- Factory Building
$ 76,800.00
Maintenance - Factory Equipment
$ 35,400.00
Depreciation - Factory Equipment
$ 33,550.00
Miscellaneous Production Cost
$ 8,425.00
Factory Utilities
$ 33,000.00
Total factory overheads
$ 354,000.00
Total manufacturing Cost
$ 1,263,850.00
Add: Work in process December 31 2014
$ 15,700.00
Less: Work in process December 31 2015
$ 19,380.00
Cost of Goods Manufactured
$ 1,260,170.00
LEONE COMPANY
Income Statement
For the year ended December 31st 2015
Sales
$ 4,462,500.00
Cost of Goods Sold
Beginning Finished Goods Inventory
$ 167,350.00
Cost of goods Manufactured
$1,260,170.00
Goods Available for sale
$1,427,520.00
Less: Ending Finished Goods Inventory
$ 136,490.00
Cost of Goods Sold
$ 1,291,030.00
Gross Profit from Sales
$ 3,171,470.00
Operating Expenses
Selling Expenses
Advertisement Expenses
$ 28,750.00
Depreciation-Selling Equipment
$ 8,600.00
Rent-Selling Space
$ 26,100.00
Sales Salaries expenses
$ 392,560.00
Total selling Expenses
$ 456,010.00
General And Administrative Expenses
Depreciation-Office Equipment
$ 7,250.00
Office Salaries Expenses
$ 63,000.00
Rent Expenses-Office Space
$ 22,000.00
Total General and Administrative Expenses
$ 92,250.00
Total Operating expenses
$ 548,260.00
Income Before Taxes
$ 2,623,210.00
Income Taxes Expenses
$ 233,725.00
Net Income
$ 2,389,485.00
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