Question

Required information Exercise 2-28 Schedules of Cost of Goods Manufactured and Sold; Income Statement (LO 2-1, 2-3, 2-6) [The following information applies to the questions displayed below.] Alhambra Aluminum Company, a manufacturer of recyclable soda cans, had the following inventory balances at the beginning and end of 20x1 Inventory Raw material Work in process Finished goods January 1, 20x1 60,000 120,000 140,000 December 31, 20x1 70,000 115,000 165,000 Classification During 20x1, the company purchased $240,000 of raw material and spent $400,000 for direct labor. Manufacturing overhead costs were as follows: $ 12,000 Indirect material Indirect labor Depreciation on plant and 24,000 00,000 24,000 equipment Utilities Other 30,000 Sales revenue was $1,108,000 for the year. Selling and administrative expenses for thee year amounted to $110,000. The firm's tax rate is 40 percent.

Answer 1

ALHAMBRA ALUMINIUM COMPANY
Schedule of cost of good sold
For the year ended December 31 , 20X1
	$	$
1 . Raw Materials;
Beginning inventory of raw materials	60,000
Add: Purchases of raw materials	240,000
Less: Ending inventory of raw materials	(70,000)
Raw Materials consumed		230,000
2. Direct Labor		400,000
3. Manufacturing overheads;
Indirect Materials	12,000
Indirect Labor	24,000
Depreciation on Plant and Equipment	100,000
Utilities	24,000
Other	30,000
Total manufacturing overhead		190,000
4. Beginning work in process		120,000
5. Ending work in process		(115,000)
6. Cost of goods manufactured ( 1 + 2 + 3 + 4 + 5 )		825,000
7. Beginning inventory of finished goods		140,000
8. Cost of goods available for sale ( 6 + 7 )		965,000
9. Ending inventory of finished goods		(165,000)
10 . Cost of goods sold ( 8 + 9 )		800,000