Question

The following information is available for Robstown Corporation for 20Y8:

Inventories
January 1
December 31
Materials $77,250 $93,600
Work in process 108,800 96,700
Finished goods 112,500 108,400
December 31
Advertising expense $ 67,800
Depreciation expense-office equipment 23,000
Depreciation expense-factory equipment 14,600
Direct labor 186,100
Heat, light, and power-factory 5,550
Indirect labor 23,800
Materials purchased 123,800
Office salaries expense 78,300
Property taxes-factory 4,145
Property taxes-office building 13,800
Rent expense-factory 6,550
Sales 861,500
Sales salaries expense 138,500
Supplies-factory 4,750
Miscellaneous costs-factory 4,420
a. Prepare the 20Y8 statement of cost of goods manufactured. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Robstown Corporation
Statement of Cost of Goods Manufactured
1
2
Direct materials:
3
4
5
6
7
8
9
Factory overhead:
10
11
12
13
14
15
16
17
18
19
20
21
b. Prepare the 20Y8 income statement. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive.
Robstown Corporation
Income Statement
1
2
Cost of goods sold:
3
4
5
6
7
8
9
Operating expenses:
10
Administrative expenses:
11
12
13
14
Selling expenses:
15
16
17
18

Answer 1

Answer and Explanation:

The preparations are as follows:

1) For Cost of goods manufactured

Opening Work in process inventory $108,800

Direct materials:

Opening inventory $77,250

Add: Purchases $123,800

Cost of materials available for use $201,050

Less: Ending inventory - $93,600

Cost of direct materials used $107,450

Add: Direct labor $186,100

Factory overhead

Indirect labor $23,800

Depreciation expense - factory equipment $14,600

Heat, light, and power - factory $5,550

Property taxes - factory $4,145

Rent expense - factory $6,550

Supplies - factory $4,750

Miscellaneous cost - factory $4,420

Total factory overhead $63,815

Total manufacturing costs spent $357,365

Total manufacturing costs $466,165

Less: ending work in process inventory -$96,700

Cost of goods manufactured $369,465

2. For Income statement

Sales $861,500

Less: Cost of goods sold:

Opening finished goods inventory $112,500

Add: Cost of goods manufactured $369,465

Cost of finished goods available for sale $481,965

Less: Ending finished goods inventory -$108,400

Cost of goods sold $373,565

Gross profit $487,935

Less: Operating expenses:

Administrative expenses:

Office salaries expense $78,300

Depreciation expense - office equipment $23,000

Property taxes - office building $13,800

Selling expenses:

Advertising expense $67,800

Sales salaries expense $138,500

Total operating expenses $321,400

Net income $166,535