Question

Consider the following information for Huntersville, Inc, for the fiscal year ended December 31 Depreciation expense-administrative office $ 32,000 Depreciation expense-plant and equipment 86,000 Direct labor-wages 487,000 Direct materials inventory, Dec. 31 26,000 Direct materials inventory, Jan. 1 19,000 Direct materials purchases 155,000 Finished goods inventory, Dec. 31 38,000 Finished goods inventory, Jan. 1 15,000 Heat, light, and power-plant 44,000 Indirect labor 25,000 Property taxes-plant 34,000 Sales representatives' salaries 145,000 Sales revenue 1,495,000 Factory supervisor's salary 66,000 Supplies-administrative office 16,000 Supplies-plant 29,000 Work-in-process inventory, Dec. 31 9,000 Work-in-process inventory, Jan. 1 23,000 Required Prepare a statement of cost of goods manufactured and an income statement for Huntersville for the year ended December 31, similar to those in Exhibit 3.15A

Answer 1

Schedule of Cost of goods manufactured

Direct materials:
Beginning raw material inventory	19,000
Add: Purchases of raw material	155,000
Total raw materials available	174,000
Less: Ending raw materials inventory	- 26,000
Raw materials used in production		148,000
Direct labor		487,000
Manufacturing overheads
Depreciation expense - Plant and equipment	86,000
Heat, light and power - plant	44,000
Indirect labor	25,000
Property taxes - plant	34,000
Factory supervisor's salary	66,000
Supplies - plant	29,000
Total Manufacturing overheads		284,000
Total manufacturing cost		919,000
Add: Beginning work in process inventory		23,000
		942,000
Less: Ending work in process inventory		- 9,000
Cost of goods manufactured		933,000

Income statement

Sales		1,495,000
Cost of goods sold
Beginning finished goods inventory	15,000
Add: Cost of goods manufactured	933,000
Cost of goods available for sale	948,000
Less: Ending finished goods inventory	- 38,000
Cost of goods sold		- 910,000
Gross profit		585,000
Selling and administrative expenses
Depreciation expense - Administrative office	32,000
Supplies - Administrative office	16,000
Sales representatives salaries	145,000
Total Selling and administrative expenses		- 193,000
Net income		$392,000