Question

Everal 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
$281,120.00
$176,500.00
3
Materials inventory, May 31
(a)
177,500.00
4
Materials purchased
713,200.00
340,300.00
5
Cost of direct materials used in production
751,600.00
(a)
6
Direct labor
1,058,600.00
(b)
7
Factory overhead
328,000.00
179,200.00
8
Total manufacturing costs incurred in May
(b)
1,034,000.00
9
Total manufacturing costs
2,678,800.00
1,477,500.00
10
Work in process inventory, May 1
540,600.00
443,500.00
11
Work in process inventory, May 31
451,000.00
(c)
12
Cost of goods manufactured
(c)
1,028,000.00
13
Finished goods inventory, May 1
476,000.00
200,500.00
14
Finished goods inventory, May 31
495,600.00
(d)
15
Sales
4,143,000.00
1,670,000.00
16
Cost of goods sold
(d)
1,051,500.00
17
Gross profit
(e)
(e)
18
Operating expenses
538,000.00
(f)
19
Net income
(f)
380,900.00
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. For those boxes in which you must enter subtracted or negative numbers use a minus sign*
c. Prepare Yakima Company’s income statement for May. Enter all amounts as positive numbers.*
*Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Answer 1

To determine the missing amounts in the income statement and cost of goods manufactured statement, we can use the given information and solve for the missing values. For Yakima Company, the missing values are as follows: (a) Materials inventory, May 31 = $234,200; (b) Direct labor = $348,800; (c) Cost of goods manufactured = $475,900; (d) Finished goods inventory, May 31 = $569,100; (e) Gross profit = $618,500; (f) Operating expenses = $237,600.

Step-by-step explanation:

To determine the missing amounts in the income statement and cost of goods manufactured statement, we can use the given information and solve for the missing values.

For Yakima Company:

1. Materials inventory, May 31 = Materials inventory, May 1 + Materials purchased - Cost of direct materials used in production
   a = $176,500 + $340,300 - $751,600 = $234,200
2. Direct labor = Total manufacturing costs incurred in May - Materials inventory, May 31 - Work in process inventory, May 31
   b = $1,034,000 - $234,200 - $451,000 = $348,800
3. Cost of goods manufactured = Work in process inventory, May 1 + Direct labor + Factory overhead - Work in process inventory, May 31
   c = $443,500 + $348,800 + $179,200 - $495,600 = $475,900
4. Cost of goods sold = Finished goods inventory, May 1 + Cost of goods manufactured - Finished goods inventory, May 31
   d = $200,500 + $475,900 - ? = $1,051,500
5. Gross profit = Sales - Cost of goods sold
   e = $1,670,000 - $1,051,500 = $618,500
6. Operating expenses = Gross profit - Net income
   f = $618,500 - $380,900 = $237,600

Therefore, the missing amounts for Yakima Company are:

1. (a) Materials inventory, May 31 = $234,200
2. (b) Direct labor = $348,800
3. (c) Cost of goods manufactured = $475,900
4. (d) Finished goods inventory, May 31 = $569,100
5. (e) Gross profit = $618,500
6. (f) Operating expenses = $237,600