Consider the following information for Huntersville Inc. for the fiscal year ended December 31. Depreciation expense-administrative office $ 33,050 Depreciation expense-plant and equipment 87,500 Direct labor-wages 499,200 Materials Inventory, Dec. 31 28,250 Materials Inventory, Jan. 1 20,500 Direct materials purchases 162,500 Finished goods inventory, Dec. 31 24,400 Finished goods inventory, Jan. 1 15,300 Heat, light, and power-plant 44,900 Indirect labor 25,600 Property taxes-plant 34,750 Sales representatives' salaries 146,500 Sales revenue 1,516,000 Factory supervisor's salary 66,450 Supplies-administrative office 16,600 Supplies-plant 29,300 Work-in-process inventory, Dec. 31 9,600 Work-in-process inventory, Jan. 1 23,750 Required: Prepare a statement of cost of goods manufactured and an income statement for Huntersville for the year ended December 31.

Question

Breanna Stark

Business

23 March, 21:06

Consider the following information for Huntersville Inc. for the fiscal year ended December 31. Depreciation expense-administrative office $ 33,050 Depreciation expense-plant and equipment 87,500 Direct labor-wages 499,200 Materials Inventory, Dec. 31 28,250 Materials Inventory, Jan. 1 20,500 Direct materials purchases 162,500 Finished goods inventory, Dec. 31 24,400 Finished goods inventory, Jan. 1 15,300 Heat, light, and power-plant 44,900 Indirect labor 25,600 Property taxes-plant 34,750 Sales representatives' salaries 146,500 Sales revenue 1,516,000 Factory supervisor's salary 66,450 Supplies-administrative office 16,600 Supplies-plant 29,300 Work-in-process inventory, Dec. 31 9,600 Work-in-process inventory, Jan. 1 23,750 Required: Prepare a statement of cost of goods manufactured and an income statement for Huntersville for the year ended December 31.

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Kennedi Cummings · Answer 1

Statement of cost of goods manufactured

Depreciation expense-plant and equipment 87,500

Direct labor-wages 499,200

Materials (20,500+162,500-28,250) 157,750

Heat, light, and power-plant 44,900

Indirect labor 25,600

Property taxes-plant 34,750

Factory supervisor's salary 66,450

Supplies-plant 29,300

Total Cost of Goods Manufactured 945,450

Add Opening Work-in-process inventory 23,750

Less Closing Work-in-process inventory (9,600)

Cost of Goods Manufactured 959,600

Income statement for Huntersville for the year ended December 31

Sales revenue 1,516,000

Less Cost of Goods Sold:

Opening Finished goods inventory 24,400

Add Cost of Goods Manufactured 959,600

Less Closing Finished goods inventory (15,300) (968,700)

Gross Profit 547,300

Less Expenses;

Depreciation expense-administrative office (33,050)

Sales representatives' salaries (146,500)

Supplies-administrative office (16,600)

Net Income / (loss) 351,150

Explanation:

Be careful to consider only manufacturing (Plant related costs) in the computation of cost of goods manufactured.

Cost of Goods manufactured is transferred to Income Statement. Account for non-manufacturing costs in the Income Statement.