Alternate Demo Problem Eighteen
Using the following information for Superior Manufacturing Company,
prepare a manufacturing statement and an income statement for the year
ended December 31, 2015. (Assume a 25% income tax.) Further assume
that all raw materials used were direct materials and the factory overhead
costs were totaled for you on a separate schedule..
Raw Materials Inventory January 1, 2015………………………. $20,000
Raw Materials Inventory December, 31, 2015………………….. 40,000
Work in Process Inventory January 1, 2015……………………. 50,000
Work in Process Inventory December 31, 2015………………… 80,000
Finished Goods Inventory January 1, 2015…………….…..…..…... 120,000
Finished Goods Inventory December 31, 2015.…..…..…..…….... 60,000
Administrative Expenses…………………………………………………….. 30,000
Selling Expenses………………………………………………………..…..….. 60,000
Sales………………………………………………………………………..…..….... 600,000
Raw Materials purchases during 2015…………………………… 150,000
Direct Labor …………………………………………………………… 120,000
Factory Overhead (per separate schedule)……………………… 180,000
Solution: Alternate Demo Problem Eighteen
SUPERIOR MANUFACTURING COMPANY
Manufacturing Statement
For Year Ended December 31, 2015
Raw Materials Inventory, 1/1/15……..…..…..…..…..… $ 20,000
Raw Materials Purchases………………..…..…..…..…... 150,000
Raw Materials Available for Use…..…..…..…..…..….. 170,000
Less Raw Materials Inventory, 12/31/15……..….…... 40,000
Direct Materials…………………………………………….. $130,000
Direct Labor………………………………………… 120,000
SUPERIOR MANUFACTURING COMPANY
Income Statement
For Year Ended December 31, 2015
Sales $ 600,000
Cost of Goods Sold:
Finished Goods Inventory, 1/1/15…..…..…..…..…..… $140,000
Cost of Goods Manufactured……………….…..…..…... 400,000
Cost of Goods Available for Sale…………………..…... 540,000
Finished Goods Inventory, 12/31/15..…..…..…..….... 90,000
Income before Taxes…………………………………. 60,000
Income Tax Expense…………………………..…..…..….... 15,000
Net Income after Taxes………………….…..…..…..…..… $ 45,000