Manufacturing costs/income statement
You are given the following information for a company and it appears to have a number of
missing values.
For the Year ending December 31, 2014
Beginning direct materials inventory: $100
Purchases of direct materials: ($A)
Ending direct materials: $68
Direct materials used: $180
Direct labor: ($B)
Manufacturing overhead: $230
Total manufacturing costs added this period: ($C)
Beginning WIP inventory: $73
Ending WIP inventory:$ 44
Cost of Goods Manufactured: $775
Beginning FG inventory: $ 74
Ending FG inventory: ($D)
Cost of goods sold: $750
Net Sales: $1,200
Selling and administrative expenses: $270
Net income: ($E)
For the Year ending December 31, 2015
Beginning direct materials inventory: ($F)
Purchases of direct materials: $120
Ending direct materials: $90
Direct materials used: $98
Direct labor: $300
Manufacturing overhead: ($G)
Total manufacturing costs added this period: $690
Beginning WIP inventory: ($H)
Ending WIP inventory: $ 60
Cost of Goods Manufactured: ($I)
Beginning FG inventory: ($J)
Ending FG inventory: ($K)
Cost of goods sold: $650
Net Sales: $1,000
Selling and administrative expenses: ($L)
Net income: $110
Required:
1. Determine the correct amounts for A through L.
A.
G.
B.
H.
C.
I.
D.
J.
E.
K.
F.
L.
2. Prepare the following journal entries for the year ending December 31, 2015
a. Purchase of direct materials (amount calculated in Part F.)
b. Direct labor used in production ($300)
c. Cost of goods manufactured (amount calculated in Part I.)
d. Sale and Cost of goods sold (Sales 1,000 and COGS $650).
3. Prepare an income statement for the year ending December 31, 2015
