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

ID: 2332426 • Letter: 1

Question

1. (9 points) The following data have been taken from the accounting records of Larder Corporation for the just completed year S1,550,000 $210,000 $345,000 S360,000 $315,000 .. $210,000 $170,000 $120,000 $120,000 $115,000 $150,000 $165,000 Purchases of raw materials Work in process inventory, beginning.... Finished goods inventory, begining... 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

Answers

WIP Inventory Beginning

$                                   120,000.00

Direct Material used:

Raw Material inventory, beginning

$                                 170,000.00

Purchase of Material

$                                 210,000.00

Raw Material inventory, ending

$                              (120,000.00)

Direct Material used

$                260,000.00

Direct Labor

$                345,000.00

Applied Manufacturing Overhead

$                360,000.00

Total manufacturing cost

$                                   965,000.00

Total cost of WIP

$                               1,085,000.00

WIP Inventory Ending

$                                 (115,000.00)

Cost of Goods manufactured

$                                   970,000.00

Finished Goods Inventory, Beginning

$                                 150,000.00

Cost of Goods manufactured

$                                 970,000.00

Cost of Goods Available for sale

$                             1,120,000.00

Finished Goods Inventory, Ending

$                              (165,000.00)

Cost of Goods Sold

$                                 955,000.00

Sales

$            1,550,000.00

Cost of Goods Sold

$                955,000.00

Gross Profits

$                595,000.00

Operating Expenses:

Administrative expenses

$                                 315,000.00

Selling Expenses

$                                 210,000.00

Total Operating Expenses

$                525,000.00

Operating Income

$                  70,000.00

WIP Inventory Beginning

$                                   120,000.00

Direct Material used:

Raw Material inventory, beginning

$                                 170,000.00

Purchase of Material

$                                 210,000.00

Raw Material inventory, ending

$                              (120,000.00)

Direct Material used

$                260,000.00

Direct Labor

$                345,000.00

Applied Manufacturing Overhead

$                360,000.00

Total manufacturing cost

$                                   965,000.00

Total cost of WIP

$                               1,085,000.00

WIP Inventory Ending

$                                 (115,000.00)

Cost of Goods manufactured

$                                   970,000.00