1. 2. Prepare a schedule of cost of goods sold. Prepare a schedule of cost of go
ID: 2419367 • Letter: 1
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2. Prepare a schedule of cost of goods sold.
Prepare a schedule of cost of goods manufactured.2. Prepare a schedule of cost of goods sold.
3. Prepare an income statement for the year.Problem 2-23A Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO2-6] Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): $216,000 $269,000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Total actual manufacturing overhead costs $158,000 $331,000 $354,000 Inventory balances at the beginning and end of the year were as follows Beginning of Year End of Year Raw materials Work in process Finished goods 60,000 37,000 ? 28,000 $ 33,000 The total manufacturing costs for the year were $685,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $39,000. The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.
Explanation / Answer
Schedule of Cost of Goods Manufactured In $ a Cost of Direct Material used (Refer note 1) 292000 b Cost of direct labour used (Refer Note 2) 39000 c Manufacturing overhead assigned 354000 d Manufacturing cost incurred during the period (a+b+c) 685000 e Work in progress at the beginning (Refer Note 3) 83000 f Work in progress at the end 28000 Cost of Goods Manufactured (d + e - f) 740000 Schedule of Cost of Goods Sold In $ Cost of Goods Manufactured ( as per above schedule) 740000 Add : Finished Goods at the beginning (Refer Note 4) 33000 Less : Finished Goods at the end 105000 Cost of Goods sold 668000 Income statement In $ Sales (Refer Note 5) 923000 Less : Cost of Goods sold 668000 Less : Selling Expenses 216000 Net operating Income 39000 Note 1 Cost of direct material used Raw material at the beginning 60000 (+) Purchase of Raw Material 269000 (-) Raw material at the end 37000 Cost of direct material used 292000 Note 2 Cost of Direct labour Total Manufacturing cost for the year 685000 (-) Direct material cost 292000 (-) Manufacturing Overhead cost 354000 Cost of Direct labour 39000 Note 3 WIP at the beginning Cost of Goods Manufactured during the year 740000 (+) WIP at the end 28000 (-) Manufacturing cost incurred during the period 685000 WIP at the beginning 83000 Note 4 Finished goods at the end Cost of Goods Manufactured ( as per above schedule) 740000 Add : Finished Goods at the beginning (Refer Note 4) 33000 Less :Cost of Goods sold 668000 Finished goods at the end 105000 Note 5 SALES Net operating Income 39000 (+) Selling exp. 216000 (+) Cost of goods sold 668000 Sales 923000
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