Question

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials): $ $ 217.000 270.000 Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost $ S $ 153,000 369,000 355.000 Inventory balances at the beginning and end of the year were as follows: Raw materials Work in process Finished goods Beginning of Year $ 60.000 ? $ 38.000 End of Year $ 37.000 $ 28.000 The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $735,000; the unadjusted cost of goods sold totaled 5668,000, and the net operating income was $40,000. The company's underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Complete this question by entering your answers in the tabs below. Income Statement COGS Schedule COGM Schedule Prepare an income statement for the year. Superior Company Income Statement Sales Selling and administrative expenses: Activate Windows Go to Settings to activate Windows.

Answer 1

Income Statement
Sales		1064000
Cost of goods sold		654000
Gross margin .		410000
Selling and administrative expenses:
Selling expenses	217000
Administrative expense	153000	370000
Net operating income		40000
Schedule of Cost of Goods Sold
Finished goods inventory, beginning		36000
Add: Cost of goods manufactured		699000
Cost of goods available for sale		735000
Deduct: Finished goods inventory, ending		67000
Unadjusted cost of goods sold		668000
Less: Overapplied overhead		14000
Adjusted cost of goods sold		654000
Schedule of Cost of Goods Manufactured
Direct materials:
Raw materials inventory, beginning	60000
Add: Purchases of raw materials	270000
Total raw materials available	330000
Deduct: Raw materials inventory, ending	37000
Raw materials used in production		293000
Direct labor		18000
Manufacturing overhead applied to work in process inventory		369000
Total manufacturing costs		680000
Add: Beginning work in process inventory		47000
		727000
Deduct: Ending work in process inventory		28000
Cost of goods manufactured		699000