Question

Prepare an income statement for Delray Mfg. (a manufacturer). DELRAY MFG. Income Statement For Year Ended December 31, 2017 Cost of goods sold Cost of goods available for sale Cost of goods sold Operating expenses Total operating expenses Operating income

Answer 1

Solution

DELRAY MFG
Income Statement
For the year ended December 31, 2017
Sales		$ 1,305,000
Cost of Goods Sold
Beginning Finished Goods Inventory	$ 66,900
Cost of goods Manufactured	$ 569,150
Goods Available for sale	$ 636,050
Less: Ending Finished Goods Inventory	$ 66,200
Cost of Goods Sold		$ 569,850
Gross Profit		$ 735,150
Operating Expenses
General and Administrative expenses	$ 127,000
Selling Expenses
Advertisement Expenses	$ 91,000
Total Operating expenses		$ 218,000
Net Income		$ 517,150

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DELRAY MFG
Cost of Goods manufactured
For the year ended December 31, 2017
Labels	Amount Descriptions	Amount Descriptions
Direct materials
Direct materials inventory, December 31, 2016	$ 35,000
Direct materials purchases	$ 192,400
Cost of direct materials available for use	$ 227,400
Direct materials inventory, December 31, 2017	$ 41,000
Cost of direct materials placed in production		$ 186,400
Direct labor		$ 239,000
Factory overhead
Indirect Labor	$ 46,000
Factory Computer supplies used	$ 22,300
Repairs—Factory equipment	$ 5,250
Rent Expenses-Factory	$ 57,000
Total Factory Overheads		$ 130,550
Total Manufacturing Cost		$ 555,950
Add: Work in process inventory, December 31, 2016		$ 58,200
Total work in process during the period		$ 614,150
Less: Work in process inventory, December 31, 2017		$ 45,000
Costs of good manufactured		$ 569,150