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4A (LO 3) Prepare a cost of goods manufactured schedule, a partial income statement, and a partial
The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 20
Instructions
(a) Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materi
(b) Prepare an income statement through gross profit.
(c) Prepare the current assets section of the balance sheet at June 30, 2020.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a
(a) Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materi
CLARKSON COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended June 30, 2020
Work in process inventory, July 1, 2019
Direct materials
Raw materials inventory, July 1, 2019 $48,000
Raw materials purchases 96,400
Total raw materials available for use 144,400
Less: Raw materials inventory, June 30, 2020 39,600
Direct materials used
Direct labor
Manufacturing overhead
Plant manager's salary $58,000
Factory utilities 27,600
Indirect labor 24,460
Factory machinery depreciation 16,000
Factory property taxes 9,600
Factory insurance 4,600
Factory repairs 1,400
Total manufacturing overhead
Total manufacturing costs
Total cost of work in process
Less: Work in process, June 30, 2020
Cost of goods manufactured
CLARKSON COMPANY
(Partial) Income Statement
For the Year Ended June 30, 2020
Sales Revenues
Sales Revenue $534,000
Less: Sales discounts 4,200
Net Sales
Cost of goods sold
Finished goods inventory, July 1, 2019 96,000
Cost of goods manufactured 386,910
Cost of goods available for sale 482,910
Less: Finished goods inventory, June 30, 2020 75,900
Cost of goods sold
Gross profit
(c) Prepare the current assets section of the balance sheet at June 30, 2020.
CLARKSON COMPANY
(Partial) Balance Sheet
June 30, 2020
Assets
Current assets
Cash $32,000
Accounts Receivable 27,000
Inventories
Finished goods $96,000
Work in process 19,800
Raw materials 48,000 $163,800
Total current assets $193,100
After you have completed P19.4A, consider the additional question.
1. Assume that in preparing the cost of goods manufactured schedule, several errors were made. Raw
sales revenue and factory depreciation should have been $106,400, $584,000 and $18,000 respecti
of these changes on the cost of goods manufactured schedule, income statement and balance shee
artial income statement, and a partial balance sheet
e 30, 2020.
a number or a formula in cells with a "?" .
PANY
red Schedule
e 30, 2020
$19,800
$184,000
139,250
141,660
141,660
161,460
Value
$395,560
$529,800
415,660
$114,140
e 30, 2020.
dule, several errors were made. Raw materials purchases,
6,400, $584,000 and $18,000 respectively. Show the impact
, income statement and balance sheet.
P19.5A Prepare a cost of goods manufactured schedule and a correct income statement
Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020.
An inexperienced assistant accountant has prepared the following income statement for
the month of October 2020.
EMPIRE COMPANY
income Statement
For the Month Ended October 31, 2020
Sales Revenue
Less: Operating Expenses
Raw materials purchases $264,000
Direct labor costs 190,000
Advertising expense 90,000
Selling and administrative salaries 75,000
Rent on factory facilities 60,000
Depreciation on sales equipment 45,000
Depreciation on factory equipment 31,000
Indirect labor cost 28,000
Utilities expense 12,000
Insurance expense 8,000
Net loss
Prior to October 2020, the company had been profitable every month. The company's president is concern
about the accuracy of the income statement. As her friend, you have been asked to review the income sta
and make necessary corrections. After examining other manufacturing cost data, you have acquired addit
information as follows.
1. Inventory balances at the beginning and end of October were:
October 1 October 31
Raw materials $18,000 $29,000
Work in process 20,000 14,000
Finished goods 30,000 50,000
2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory
operations. The remaining amounts should be charged to selling and administrative
activities.
Instructions
(a) Prepare a schedule of cost of goods manufactured for October 2020.
(b) Prepare a correct income statement for October 2020.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a
(a) Prepare a schedule of cost of goods manufactured for October 2020.
EMPIRE COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended October 31, 2020
Work in process inventory, October 1
Direct materials
Raw materials inventory, October 1 $48,000
Raw materials purchases 96,400
Total raw materials available for use 144,400
Less: Raw materials inventory, October 31 Value
Direct materials used
Direct labor
Manufacturing overhead
Rent on factory facilities Value
Depreciation on factory equipment 16,000
Indirect labor 24,460
Factory utilities 27,600
Factory insurance 4,600
Total manufacturing overhead
Total manufacturing costs
Total cost of work in process
Less: Work in process, October 31
Cost of goods manufactured
EMPIRE COMPANY
Income Statement
For the Month Ended October 31, 2020
Sales Revenue Value
Cost of goods sold
Finished goods inventory, October 1 Value
Cost of goods manufactured ?
Cost of goods available for sale ?
Less: Finished goods inventory, October 31 Value
Cost of goods sold ?
Gross profit ?
Operating expenses
Advertising expense Value
Selling and administrative salaries Value
Depreciation expense - sales equipment Value
Insurance expense ?
Utilities expense ?
Total operating expenses ?
Net income ?
$780,000
$803,000
($23,000)
apply to factory
d administrative
?
Value
?
?
?
Value
?
5,000 and $9,000 respectively. Also assume
factory operations. Show the impact of these
e statement.