4. Schedule of cost of goods manufactured, income statement The following inform

Question

4. Schedule of cost of goods manufactured, income statement
The following information was taken from the ledger of Jefferson Industries, Inc.:
Direct labor   $85,000        Administrative expenses   $59,000
Selling expenses   34,000       Work in. process:  
Sales   300,000       Jan. 1   29,000
Finished goods           Dec. 31   21,000
Jan. 1   115,000       Direct material purchases   88,000
Dec. 31   131,000       Depreciation: factory   18,000
Raw (direct) materials on hand   Indirect materials used   10,000
Jan. 1   31,000       Indirect labor   24,000
Dec. 31   40,000       Factory taxes   8,000
           Factory utilities   11,000
Prepare the following:
a.   A schedule of cost of goods manufactured for the year ended December 31.
b.   An income statement for the year ended December 31.

Explanation / Answer

Schedule of cost of goods manufactured

Income Statement

Beginning raw materials: $31,000 Add:Purchases 88,000 Less: Closing (40,000) Raw materials used $79,000 Direct labor $85,000 Prime cost $164,000 Depreciation Factory 18,000 Indirect materials used 10,000 Indirect labor 24,000 Factory taxes    8,000 Factory utilities 11,000 Total manufacturing cost $235,000 Add: Beginning inventory WIP $29,000 less: Ending WIP $(21,000) Cost of goods manufactured $243,000

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