The Cake Factory has he following information for the month of March. Prepare (a

Question

The Cake Factory has he following information for the month of March. Prepare (a) schedule of cost of goods sold, and (b) an income statement for the month ended March 31, 2009. and (c) show adjusting entry if the actual factor overhead is determined to be$40,000 Purchases of materials were Materials inventory, March 1, 2009 Materials Inventory, March 31, 2009 Direct Labor Factory Overhead (Applied) Work in Process, March 1, 2009 Work in Process, March 31, 2009 Finished goods inventory, March 1, 2009 Finished goods inventory, March 31, 2009 Sales Selling expenses Adminstrative expenses $85,000 $6,000 $7,000 $25,000 $34,000 $17,000 $18,500 $21,000 $23,000 $235,000 $28,000 $50,000 a) Cake Factory Cost of Goods Schedule For the month ending March 31, 2009 b) Cake Factory Income Statement For the month ending March 31, 2009 C) Cake Factory Adjusting entry Debit Credit 3/31/09

Explanation / Answer

a Statement of Cost of Goods Manufactured Work in process inventory March 1 17000 Direct Materials: Materials inventory, March 1 6000 Purchases 85000 Cost of materials for use 91000 Less materials inventory, March 31 7000 Cost of materials placed in production 84000 Direct Labor 25000 Factory overhead 34000 Total manufacturing costs added 143000 Total manufacturing costs 160000 Less work in process inventory, March 31 18500 Cost of goods manufactured 141500 b Income Statement Sales 235000 Cost of goods sold: Finished goods inventory, March 1 21000 Cost of goods manufactured 141500 Cost of finished goods available for sale 162500 Less finished goods inventory, March 31 23000 Cost of goods sold 139500 Gross Profit 95500 Operating expenses: Sales and administrative expenses 78000 Net Income 17500 c 3/31/09 Cost of goods sold 6000           Factory overhead 6000

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