ABC Company, a manufacturing firm, has supplied the following information from its

accounting

Records for the year 2020

Purchases of raw materials Br.76,000

Direct labor cost 52,500

Supplies used 5,300

Factory insurance 1,050

Commissions paid 7,500

Factory supervision 9,675

Advertising 2,400

Material handling 11,000

Work-in-process inventory, January 1, 2020 47,500

Work-in-process inventory, December 31, 2020 42,000

Materials inventory, January 1, 2020 10,400

Materials inventory, December 31, 2020 28,500

0
Finished goods inventory, January 1, 2020 20,055

Finished goods inventory, December 31, 2020 10,750

Sales as of December 31, 2020 250,000

Sales as of December 31, 2020

Required
1. Prepare a statement of cost of goods manufactured. (10 points)

2. Prepare a statement of cost of goods sold. (5 points)

3. Prepare income statement (5-points)

Expert's answer
Cost of Goods mannufactured
Direct Materials+ Direct Labour+ Manufacturing Overhead+ Opening WIP- Ending WIP
Direct Materials
Beginning Raw materials= 10,400
Purchases of R/M = 76000
Ending R/M =(28500)
=57,900
Direct Labour = 52500
Manufacturing cost( Material Handling cost)= 11,000
Opening WIP = 47,500
Closing WIP =(42,000)
=5,500
\therefore
COGM=57,900+52,500+11,000+5,500=126,900∴COGM=57,900+52,500+11,0
00+5,500=126,900
Cost of Goods Sold
= Opening stock of finished goods+Purchases-Closing stock of finished goods
Opening stock = 20,055
Purchases( COGM)=126,900
Closing Stock = (10750)
=136,205
Income statement
Sales =250,000
Cost of goods sold =(136,205)
Gross profit =113,795