Manufacturing Income Statement, Statement of Cost of Goods Manufactured Several

Question

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December 2014:

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

2. Prepare McClellan Company's statement of cost of goods manufactured for December. Enter all amounts as positive numbers.

3. Prepare McClellan Company's income statement for December.

Grant

Company McClellan

Company Materials inventory, December 1 $90,070 $120,690 Materials inventory, December 31 (a) 136,380 Materials purchased 228,780 271,550 Cost of direct materials used in production 241,390 (a) Direct labor 339,560 (b) Factory overhead 105,380 135,170 Total manufacturing costs incurred during December (b) 780,860 Total manufacturing costs 859,270 1,071,720 Work in process inventory, December 1 172,930 290,860 Work in process inventory, December 31 145,910 (c) Cost of goods manufactured (c) 773,620 Finished goods inventory, December 1 152,220 135,170 Finished goods inventory, December 31 159,420 (d) Sales 1,327,630 1,206,900 Cost of goods sold (d) 780,860 Gross profit (e) (e) Operating expenses 172,930 (f) Net income (f) 267,930

Explanation / Answer

Missing Items Letter Grant Company McClellan Company a                     77,460                          255,860 b                  686,330                          389,830 c                  713,350                          298,100 d                  706,150                          127,930 e                  621,480                          426,040 f                  267,930                          172,930 McClellan Company Cost of Goods Manufactured Schedule for the year ended December 31, 2014 Particulars Amount (in $) Amount (in $) Direct Material Used Beginning Raw Material Inventory, Jan 1              120,690 Add: Cost of Raw Material Purchased              271,550 Total Raw Materials available              392,240 Less: Ending Raw Materials Inventory, Dec 31              136,380 Total Raw Materials Used              255,860 Direct Labour              389,830 Manufacturing Overhead cost : Factory Overhead              135,170 Total Manufacturing Cost              780,860 Add: Beginning work in process inventory, Jan 1              290,860          1,071,720 Less; Ending work in process inventory, Dec 31              298,100 Cost of Goods Manufactured              773,620 McClellan Company Income Statement for the year ended December 31, 2014 Particulars Amount (in $) Amount (in $) Sales Revenue          1,206,900 Less: Cost of Goods Sold Beginning Finished Goods Inventry, Jan 1              135,170 Add: Cost of Goods Manufactured              773,620 Cost of Goods Available for Sale              908,790 Less:Ending Finished Goods Inventry, Dec 31              127,930              780,860 Gross Margin              426,040 Less: Operating Cost:              172,930 Operating Income              253,110

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