Financial Statements of a Manufacturing Firm The following events took place for
ID: 2525965 • Letter: F
Question
Financial Statements of a Manufacturing Firm
The following events took place for LAE Manufacturing Company during January 2014, the first month of its operations as a producer of digital thermometers:
Purchased $61,800 of materials
Used $47,600 of direct materials in production.
Incurred $71,100 of direct labor wages.
Incurred $100,100 of factory overhead.
Transferred $166,200 of work in process to finished goods.
Sold goods with a cost of $132,300.
Earned revenues of $297,300.
Incurred $76,000 of selling expenses.
Incurred $33,400 of administrative expenses.
a. Prepare the January 2014 income statement for LAE Manufacturing Company.
LAE Manufacturing Company
Income Statement
For the Month Ended January 31, 2014
$
$
Operating expenses:
$
Total operating expenses
$
b. Determine the inventory balances at the end of the first month of operations.
LAE Manufacturing Company
Inventory Balances
For the Month Ended January 31, 2014
Inventory balances on January 31, 2014:
Materials
$
Work in process
$
Finished goods
$
Hidea. Prepare the January 2014 income statement for LAE Manufacturing Company.
LAE Manufacturing Company
Income Statement
For the Month Ended January 31, 2014
$
$
Operating expenses:
$
Total operating expenses
$
Explanation / Answer
Solution:
Part 1 --- Income Statement
LAE Manufacturing Company
Income Statement
For the Month Ended January 31, 2014
$$
$$
Earned Revenues
$297,300
Cost of Goods Sold
$132,300
Gross Profit
$165,000
Operating expenses:
Selling Expense
$76,000
Administrative expenses
$33,400
Total Operating Expenses
$109,400
Operating Income
$55,600
Part 2 ---
LAE Manufacturing Company
Inventory Balances
For the Month Ended January 31, 2014
Inventory balances on January 31, 2014:
Materials (Total Purchase 61,800 - Used 47,600)
$14,200
Work In Process (Refer Note 1)
$52,600
Finished Goods
(Units Received From WIP $166,200 - Cost of Goods Sold $132,300)
$33,900
Note 1 -- Work In Process
Direct material used in production
$47,600
Direct labor wages
$71,100
Factory Overhead
$100,100
Total Manufacturing Cost
$218,800
Add: Beginning WIP
$0
Less: Ending Work in Process (Bal Fig)
$52,600
Units transferred to Finished Goods (given)
$166,200
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
LAE Manufacturing Company
Income Statement
For the Month Ended January 31, 2014
$$
$$
Earned Revenues
$297,300
Cost of Goods Sold
$132,300
Gross Profit
$165,000
Operating expenses:
Selling Expense
$76,000
Administrative expenses
$33,400
Total Operating Expenses
$109,400
Operating Income
$55,600
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.