1. (9 points) The following data have been taken from the accounting records of

Question

1. (9 points) The following data have been taken from the accounting records of Larder Corporation for the just completed vear. $1,550,000 $210,000 $345,000 $360,000 $315,000 $210,000 70.000 $120,000 $120,000 $115,000 $150,000 $165,000 Purchases of raw materials Applied Manufacturing overhead.. Raw materials inventory, beginning. Raw materials inventory, ending Work in process inventory, beginning Finished goods inventory, beginning Finished goods inventory, ending Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form. b. Compute the Cost of Goods Sold. c. Using data from your answers above, prepare an Income Statement (using the traditional format)

Explanation / Answer

a)               Cost of Goods Manufactured Raw materials inventory, beginning 170,000 purchases of raw materials 210,000 Raw materials available for use 380,000 Raw materials inventory,ending 120,000 Raw materials used 260,000 Direct labor 345,000 Applied manufacturing overhead 360,000 total manufacturing costs 965,000 work in process inventory,beginning 120,000 1,085,000 Work in process inventory,ending 115,000 Cost of goods manufactured 970,000 b)              Cost of goods sold Finished goods inventory ,beginning 150,000 Add :cost of goods manufactured 970,000 Costs of goods available for sale 1,120,000 less:finished goods inventory ,ending 165,000 Cost of goods sold 955,000 c) Income statement Sales 1,550,000 less:cost of goods sold 955,000 Gross profit 595,000 less:Selling and administrative expense 525000 Net income 70,000

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