Question

Skylar Company is a brand new company that started operations on December 31, 2019. Skylar manufactures Dog Grooming Tables. At the end of December 2019, the accountant for Skylar Company compiled the following information:

Administrative Expense   25,000

Direct Labor 10,000
Ending Finished Goods 8,000

Ending Raw Material 20,000

Ending Work-in-Process    7,000

Manufacturing Overhead 6,000

Raw Material Purchases 50,000

Sales Revenue 120,000

Selling Expense   30,000

a) Prepare a schedule of cost of goods manufactured for December

b) Prepare an income statement for December

Answer 1

a) Prepare a schedule of cost of goods manufactured for December

Skylar Company
Schedule of cost of goods manufactured
For the year ended December 31,2019
Direct material used
Raw material purchase	50000
Less: Ending raw material	-20000	30000
Direct labor		10000
Manufacturing overhead applied		6000
Total manufacturing cost		46000
Add: Beginning work in process		0
Total cost of work in process		46000
Less: Ending work in process		-7000
Cost of goods manufactured		39000

b) Prepare an income statement for December

SKYLAR Company
Income statement
For the year ended December 31,2019
Sales revenue		120000
Cost of goods sold
Beginning finished goods	0
Cost of goods manufactured	39000
Cost of goods available for sale	39000
Less: Ending finished goods	-8000
Cost of goods sold		31000
Gross profit		89000
Less: Operating expense
Selling expense	30000
Administrative expense	25000
Total operating expense		55000
Operating income		34000