Question

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020. Raw Materials Inventory 7/1/19 $53,000 Factory Insurance $4,800 Raw Materials Inventory 6/30/20 48,400 Factory Machinery Depreciation 18,600 Finished Goods Inventory 7/1/19 97,400 Factory Utilities 30,500 Finished Goods Inventory 6/30/20 23,100 Office Utilities Expense 8,750 Work in Process Inventory 7/1/19 28,000 Sales Revenue 563,100 Work in Process Inventory 6/30/20 27,100 Sales Discounts 5,000 Direct Labor 143,150 Plant Manager’s Salary 64,200 Indirect Labor 25,760 Factory Property Taxes 9,610 Accounts Receivable 32,700 Factory Repairs 1,700 Raw Materials Purchases 97,000 Cash 41,000

Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.) Prepare an income statement through gross profit. Prepare the current assets section of the balance sheet at June 30, 2020.

Answer 1

Ans. 1	CLARKSON   COMPANY
	Cost of Goods Manufactured Statement
	For the Year Ended December 31
	Particulars	Amount	Amount
	Beginning Work in process inventory		$28,000
	Manufacturing Costs:
	Direct materials:
	Beginning raw materials inventory	$53,000
	Add: Purchase of direct materials	$97,000
	Raw materials available	$150,000
	Less: Ending raw materials inventory	-$48,400
	Direct materials used		$101,600
	Direct labor		$143,150
	Manufacturing Overhead:
	Indirect labor	$25,760
	Factory insurance	$4,800
	Factory machinery depreciation	$18,600
	Factory utilities	$30,500
	Plant manager's salary	$64,200
	Factory property taxes	$9,610
	Factory repairs	$1,700
	Manufacturing overhead applied		$155,170
	Total manufacturing costs		$399,920
	Total cost of work in process		$427,920
	Less: Ending Work in process inventory		-$27,100
	Cost of goods manufactured		$400,820
	*Total cost of work in process =   Total manufacturing costs + Beginning work in process inventory
	Total manufacturing costs = Cost of goods manufactured + Ending work in process - Beginning work in process
Ans. 2	CLARKSON   COMPANY
	Income Statement
	For the Year Ended December 31
	Particulars	Amount	Amount
	Sales revenue	$563,100
	Less: Sales discounts	-$5,000
	Net sales		$558,100
	Less: Cost of goods sold
	Cost of goods manufactured	$400,820
	Add: Beginning finished goods inventory	$97,400
	Cost of goods available for sale	$498,220
	Less: Ending finished goods inventory	-$23,100
	Cost of goods sold		$475,120
	Gross profit		$82,980
Ans. 3	CLARKSON   COMPANY
	Balance Sheet
	For the Year Ended December 31
	Assets:
	Current Assets:
	Cash		$41,000
	Accounts receivables		$32,700
	Inventories:
	Ending raw materials inventory	$48,400
	Ending work in process inventory	$27,100
	Ending Finished goods inventory	$23,100
	Total inventory		$98,600
	Total Current Assets		$172,300
	*Ending inventories are the part of Balance sheet.