Question

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May.

1		Rainier Company	Yakima Company
2	Materials inventory, May 1	$280,560.00	$176,000.00
3	Materials inventory, May 31	(a)	176,500.00
4	Materials purchased	712,400.00	340,400.00
5	Cost of direct materials used in production	752,800.00	(a)
6	Direct labor	1,058,000.00	(b)
7	Factory overhead	325,600.00	180,000.00
8	Total manufacturing costs incurred during May	(b)	1,034,000.00
9	Total manufacturing costs	2,677,200.00	1,477,000.00
10	Work in process inventory, May 1	540,800.00	443,000.00
11	Work in process inventory, May 31	451,800.00	(c)
12	Cost of goods manufactured	(c)	1,026,500.00
13	Finished goods inventory, May 1	479,200.00	202,500.00
14	Finished goods inventory, May 31	497,000.00	(d)
15	Sales	4,143,000.00	1,673,500.00
16	Cost of goods sold	(d)	1,045,000.00
17	Gross profit	(e)	(e)
18	Operating expenses	543,000.00	(f)
19	Net income	(f)	381,300.00

	Required:
A.	Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
B.	Prepare Yakima Company’s statement of cost of goods manufactured for May.*
C.	Prepare Yakima Company’s income statement for May.* *Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Be sure to complete the statement heading.

Labels
For the Month Ended May 31
For the Quarter Ended May 31
For the Year Ended May 31
Amount Descriptions
Cost of direct materials used
Cost of finished goods available for sale
Cost of goods manufactured
Cost of goods sold
Cost of materials available for use
Direct Labor
Factory overhead
Finished goods inventory, May 1
Finished goods inventory, May 31
Gross profit
Materials inventory, May 1
Materials inventory, May 31
Net income
Operating expenses
Purchases
Sales
Total manufacturing costs incurred during May
Work in process inventory, May 1
Work in process inventory, May 31

Starting Question

A. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

Letter	Rainier Company	Yakima Company
a.
b.
c.
d.
e.
f.

Statement of Cost of Goods Manufactured

B. Prepare Yakima Company’s statement of cost of goods manufactured for May. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Be sure to complete the statement heading.

Yakima Company

Statement of Cost of Goods Manufactured

1
2	Direct materials:
3
4
5
6
7
8
9
10
11	Total manufacturing costs
12
13

Income Statement

C. Prepare Yakima Company’s income statement for May. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. Enter all amounts as positive numbers. Be sure to complete the statement heading.

Yakima Company

Income Statement

1
2	Cost of goods sold:
3
4
5
6
7
8
9
10

Answer 1

Solutions:

Materials Purchased	712,400.00	340,400.00
Plus: Materials inventory May 1	280,560.00	176,000.00
	992,960.00	516,400.00
Less: Materials Inventory May 31	240,160.00	176,500.00
Cost of Direct materials Used in production	752,800.00	339,900.00
Plus: direct Labor	1,058,000.00	514,100.00
Plus: Factory Overhead	325,600.00	180,000.00
Total Manufacturing cost incurred during may	2,136,400.00	1,034,000.00
Plus: Work in Process Inventory May 1	540,800.00	443,000.00
Less: Work in Process Inventory May 31	451,800.00	450,500.00
Cost of Goods manufactured	2,225,400.00	1,026,500.00
Plus: Finished goods Inventory May 1	479,200.00	202,500.00
Less: Finished goods Inventory May 31	497,000.00	184,000.00
Sales	4,143,000.00	1,673,500.00
Less: Cost of Goods Sold	2,207,600.00	1,045,000.00
Gross Profit	1,935,400.00	628,500.00
Operating Expenses	543,000.00	247,200.00
NetIncome	1,392,400.00	381,300.00

Letter	Rainer	Yakima
a	240,160.00	339,900.00
b	2,136,400.00	514,100.00
c	2,225,400.00	450,500.00
d	2,207,600.00	184,000.00
e	1,935,400.00	628,500.00
f	1,392,400.00	247,200.00

Yakima
Cost of Goods Manufactured Schedule
For the Month Ended May 31
Work in process May 01		443,000.00
Direct materials used
Materials Purchased	340,400.00
Plus: Materials inventory May 1	176,000.00
Less: Materials Inventory May 31	176,500.00
Direct Materials used	339,900.00
Direct labor	514,100.00
Factory overhead	180,000.00
Total manufacturing costs	1,034,000.00	$1,034,000
Total cost of work in process		$1,477,000
Less: Work in process, May 31		450,500.00
Cost of goods manufactured		$1,026,500

Income Statement
Sales		1,673,500.00
Less: Cost of goods sold
Finished goods, May 1	202,500.00
Plus: Cost of goods manufactured	1,026,500.00
Cost of goods available for sale	1,229,000.00
Less: Finished goods, May 31	184,000.00
Cost of goods sold	1,045,000.00	1,045,000.00
Gross Profit		628,500.00
Less: Operating Expenses		247,200.00
Net Operating Income		381,300.00