The following data were taken from the records of Flexsteel Manufacturing Compan
ID: 2340004 • Letter: T
Question
The following data were taken from the records of Flexsteel Manufacturing Company for the year ended May 31, 2016.
Raw Materials
Factory Insurance
$7,000
Inventory 6/1/15
$47,000
Factory Mach-Depreciation
4,000
Raw Materials
Plant Manager’s Salary
30,000
Inventory 5/31/16
44,000
Factory Utilities
12,900
Finished Goods
Operating Expenses
100,000
Inventory 6/1/15
85,000
Sales Revenue
475,000
Finished Goods
Sales Discounts
2,500
Inventory 5/31/16
77,000
Short-term investments
5,000
Work in Process
Factory Property Taxes
6,000
Inventory 6/1/15
9,500
Factory Repairs
1,000
Work in Process
Raw Materials Purchases
67,500
Inventory 5/31/16
8,000
Cash
28,000
Direct Labor
145,000
Prepaid Expenses
2,000
Indirect Labor
18,000
Accounts Receivable
27,000
Instructions
(a) Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)
(b) Prepare an entire income statement through net income .
(c) Prepare the current asset section of the balance sheet at May 31, 2016.
Raw Materials
Factory Insurance
$7,000
Inventory 6/1/15
$47,000
Factory Mach-Depreciation
4,000
Raw Materials
Plant Manager’s Salary
30,000
Inventory 5/31/16
44,000
Factory Utilities
12,900
Finished Goods
Operating Expenses
100,000
Inventory 6/1/15
85,000
Sales Revenue
475,000
Finished Goods
Sales Discounts
2,500
Inventory 5/31/16
77,000
Short-term investments
5,000
Work in Process
Factory Property Taxes
6,000
Inventory 6/1/15
9,500
Factory Repairs
1,000
Work in Process
Raw Materials Purchases
67,500
Inventory 5/31/16
8,000
Cash
28,000
Direct Labor
145,000
Prepaid Expenses
2,000
Indirect Labor
18,000
Accounts Receivable
27,000
Explanation / Answer
RAW MATERIAL ACCOUNT Debit Credit A Raw Materials Beginning Inventory $47,000 B Raw materials Purchases $67,500 D=A+B-C Raw materials used for production $70,500 C Raw Materials Ending Inventory $44,000 Manufacturing Overheads: E Indirect labor $18,000 F Factory Insurance $7,000 G Factory Machine -Depreciation $4,000 H Plant Manager'sSalary $30,000 X Factory Property taxes $6,000 Y Factory repairs $1,000 I Factory Utilities $12,900 J=E+F+G+H+I+X+Y Total Manufacturing Overhead $78,900 WORK IN PROCESS INVENTORY ACCOUNT Debit Credit K Beginning Work in process inventory $9,500 D Raw materials used for production $70,500 L Direct labor costs $145,000 J Total Manufacturing Overhead $78,900 N=K+D+L+J-M Cost of goods manufactured $295,900 M Ending Work in process inventory $8,000 COST OF GOODS MANUFACTURE SCHEDULE Raw materials used for production $70,500 Direct labor costs $145,000 Total Manufacturing Overhead $78,900 Decrease in work in process inventory $1,500 Cost of goods manufactured $295,900 FINISHED GOODS INVENTORY ACCOUNT Debit Credit P Beginning Finished goods inventory $85,000 N Goods transferred from Workin process $295,900 Q=P+N-R Transferred to cost of goods sold $303,900 R Ending Finished goods inventory $77,000 INCOME STATEMENT Sales Revenue $475,000 Less:Sales Discount $2,500 Net Sales $472,500 Cost of goods sold $303,900 Gross Profit $168,600 Less: Operating expenes $100,000 Net Income $68,600 BALANCE SHEET (Part) As on May 31, 2016 CURRENT ASSETS Cash $28,000 Account Receivable $27,000 Prepaid expenses $2,000 Short term investments $5,000 Inventory: Raw Materials Inventory $44,000 Work in process inventory $8,000 Finished goods inventory $77,000 Total Current Assets $191,000
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