The following calendar year-end information is taken from the December 31, 2015,
ID: 2562936 • Letter: T
Question
The following calendar year-end information is taken from the December 31, 2015, adjusted trial balance and other records of Leone Company Advertising expense Depreclation expense-office equipment Depreclation expense Selling equipment 9,700 9,800 Depreciation expense-Factory equipment33,800 26,500 Direct labor Income taxes expense Indirect labor Miscellaneous production costs $ 692,300 269,500 55,900 10,300 Factory supervision Factory supplies used Factory utilities Inventorles 65,000 962,000 27,000 28,700 79,400 143,000 Office salarles expense 7,900 31,000 Raw materials purchases Rent expense Office space Rent expense-Selling space 162,800 Rent expense Factory building 184,000 Malintenance expense-Factory equipment Rew materlals, December 31, 2014 Raw materials, December 31, 2015 Work in process, December 31, 2014 Work in process, December 31, 2015 Finished goods, December 31, 2014 Finished goods, December 31, 2015 16.400 Sales 21,500 Sales salaries expense 39,000 4,496,600 98,100 164,500 36,500Explanation / Answer
LEONE COMPANY
Statement of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials
Raw materials inventory, December 31, 2014
$ 162,800
Raw materials purchases
962,000
Raw materials available for use
1,124,800
Less: Raw materials inventory, December 31, 2015
184,000
Direct materials used
$ 940,800
Direct labor
692,300
Factory overhead
Factory supervision
143,000
Factory supplies used
7,900
Factory utilities
31,000
Maintenance expense—Factory equipment
39,000
Rent expense—Factory building
79,400
Depreciation expense—Factory equipment
33,800
Indirect labor
55,900
Miscellaneous production costs
10,300
Total factory overhead costs
400,300
Total manufacturing costs
2,033,400
Add: Work in process inventory, December 31, 2014
16,400
Total cost of goods in process
2,049,800
Less: Work in process inventory, December 31, 2015
21,500
Cost of goods manufactured
$ 2,028,300
LEONE COMPANY
Income Statement
For Year Ended December 31, 2015
Sales
$ 4,496,600
Cost of goods sold
Cost of goods manufactured
$ 2,028,300
Finished goods inventory, December 31, 2014
164,500
Goods available for sale
2,192,800
Less: Finished goods inventory, December 31, 2015
136,500
Cost of goods sold
2,056,300
Gross profit from sales
2,440,300
Operating expenses
Selling expenses
Depreciation expense—Selling equipment
9,800
Rent expense—Selling space
28,700
Sales salaries expense
398,100
Advertising expense
26,500
Total selling expenses
463,100
General and administrative expenses
Rent expense—Office space
27,000
Office salaries expense
65,000
Depreciation expense—Office equipment
9,700
Total general and administrative expenses
101,700
Total operating expenses
564,800
Income before state and federal taxes
1,875,500
Income taxes expense
269,500
Net income
$ 1,606,000
LEONE COMPANY
Statement of Cost of Goods Manufactured
For Year Ended December 31, 2015
Direct materials
Raw materials inventory, December 31, 2014
$ 162,800
Raw materials purchases
962,000
Raw materials available for use
1,124,800
Less: Raw materials inventory, December 31, 2015
184,000
Direct materials used
$ 940,800
Direct labor
692,300
Factory overhead
Factory supervision
143,000
Factory supplies used
7,900
Factory utilities
31,000
Maintenance expense—Factory equipment
39,000
Rent expense—Factory building
79,400
Depreciation expense—Factory equipment
33,800
Indirect labor
55,900
Miscellaneous production costs
10,300
Total factory overhead costs
400,300
Total manufacturing costs
2,033,400
Add: Work in process inventory, December 31, 2014
16,400
Total cost of goods in process
2,049,800
Less: Work in process inventory, December 31, 2015
21,500
Cost of goods manufactured
$ 2,028,300
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