Question

Problem 2-1

The following information is available for Sipacore, Inc. for the fiscal year ending December 31, 2017:

Beginning balance in Work in Process Inventory		$230,000
Ending balance in Work in Process Inventory		280,000
Beginning balance in Finished Goods Inventory		450,000
Ending balance in Finished Goods Inventory		380,000
Direct material cost		2,840,000
Direct labor cost		2,860,000
Manufacturing overhead		1,700,000
Selling and administrative expenses		1,310,000
Sales		8,560,000

Prepare an income statement for fiscal 2017. Ignore income taxes. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Sipacore, Inc. Income Statement For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017December 31, 2017
Direct material costNon-manufacturing expensesCost of goods manufacturedBeginning finished goods inventorySalesCost of goods soldCost of goods available for saleDirect labor costSelling and administrative expensesNet income / (loss)Gross profitTotal non-manufacturing expensesBeginning work in process inventoryEnding work in process inventoryManufacturing overheadEnding finished goods inventory					$
LessAdd : Non-manufacturing expensesBeginning finished goods inventorySalesCost of goods soldBeginning work in process inventoryCost of goods manufacturedManufacturing overheadEnding finished goods inventoryCost of goods available for saleSelling and administrative expensesDirect labor costGross profitNet income / (loss)Ending work in process inventoryTotal non-manufacturing expensesDirect material cost :
Ending work in process inventory    Sales    Cost of goods sold    Direct labor cost    Cost of goods manufactured    Cost of goods available for sale    Gross profit    Non-manufacturing expenses    Selling and administrative expenses    Net income / (loss)    Manufacturing overhead    Direct material cost    Total non-manufacturing expenses    Beginning work in process inventory    Ending finished goods inventory    Beginning finished goods inventory			$
Less    Add     : Cost of goods manufacturedEnding finished goods inventoryNet income / (loss)Gross profitBeginning finished goods inventoryDirect labor costManufacturing overheadBeginning work in process inventorySalesNon-manufacturing expensesSelling and administrative expensesEnding work in process inventoryCost of goods soldCost of goods available for saleTotal non-manufacturing expensesDirect material cost
Direct labor cost    Beginning finished goods inventory    Manufacturing overhead    Cost of goods available for sale    Beginning work in process inventory    Ending finished goods inventory    Sales    Net income / (loss)    Cost of goods sold    Cost of goods manufactured    Total non-manufacturing expenses    Gross profit    Non-manufacturing expenses    Selling and administrative expenses    Ending work in process inventory    Direct material cost
Add    Less     : Gross profitCost of goods soldCost of goods available for saleSalesNet income / (loss)Direct material costEnding finished goods inventoryCost of goods manufacturedNon-manufacturing expensesSelling and administrative expensesManufacturing overheadDirect labor costTotal non-manufacturing expensesBeginning work in process inventoryBeginning finished goods inventoryEnding work in process inventory
Cost of goods manufacturedSelling and administrative expensesCost of goods available for saleGross profitEnding finished goods inventoryNet income / (loss)Total non-manufacturing expensesBeginning finished goods inventoryDirect material costBeginning work in process inventoryDirect labor costManufacturing overheadCost of goods soldSalesEnding work in process inventoryNon-manufacturing expenses
LessAdd : Direct material costBeginning finished goods inventoryNet income / (loss)Direct labor costSalesCost of goods available for saleManufacturing overheadBeginning work in process inventoryCost of goods soldCost of goods manufacturedEnding work in process inventorySelling and administrative expensesNon-manufacturing expensesTotal non-manufacturing expensesGross profitEnding finished goods inventory :
Ending finished goods inventoryManufacturing overheadNet income / (loss)Cost of goods available for saleSelling and administrative expensesNon-manufacturing expensesTotal non-manufacturing expensesBeginning finished goods inventoryGross profitBeginning work in process inventoryCost of goods manufacturedCost of goods soldEnding work in process inventoryDirect material costDirect labor costSales
Manufacturing overheadNon-manufacturing expensesNet income / (loss)Cost of goods available for saleSelling and administrative expensesGross profitTotal non-manufacturing expensesBeginning finished goods inventoryBeginning work in process inventoryEnding work in process inventoryDirect material costCost of goods manufacturedDirect labor costCost of goods soldEnding finished goods inventorySales					$

Answer 1

Solution:

Sipacore inc.
Income Statement
For the year ended December 31, 2017
Sales				$85,60,000
Cost of Goods sold:
Direct Materials used	$28,40,000
Direct labor	$28,60,000
Manufacturing Overhead	$17,00,000
Total Manufacturing costs		$74,00,000
Add: Work in process, beginning		$2,30,000
Total cost of Work in process		$76,30,000
Less: Work in pricess,ending		$2,80,000
Cost of Goods Manufactured			$73,50,000
Add: Finished Goods Inventory, beginning			$4,50,000
Cost of goods available for sale			$78,00,000
Add: Finished Goods Inventory, ending			$3,80,000
Cost of Goods sold				$74,20,000
Gross Profit				$11,40,000
Less: Selling and admin. Expenses				$13,10,000
Net Income				-$1,70,000