EXERCISE 19-14 (Continued)
AIKMAN COMPANY
Income Statement (Partial)
For the Year Ended December 31, 2017
(b) Sales revenue ………………………………… $910,000
Cost of goods sold
Finished goods, 1/1 …………………… $ 27,000
Cost of goods manufactured …….. 537,300
AIKMAN COMPANY
(Partial) Balance Sheet
December 31, 2017
(c) Current assets
Inventories
Finished goods ………………………………………. $21,000
(d) In a merchandising company’s income statement, the only difference would
be in the computation of cost of goods sold. Beginning and ending finished
EXERCISE 19–15
1. (a) 9. (a)
2. (a) 10. (a), (b)
EXERCISE 19–16
(a) ROBERTS COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2017
Work in process inventory, June 1 …………….. $ 5,000
Direct materials
Raw materials inventory, June 1 ………… $ 9,000
Manufacturing overhead
Indirect labor …………………………………….. 5,500
Factory insurance ……………………………… 4,000
Machinery depreciation……………………… 4,000
Factory utilities …………………………………. 3,100
(b) ROBERTS COMPANY
(Partial) Balance Sheet
June 30, 2017
Current assets
Inventories
Finished goods ……………………………………. $ 8,000
EXERCISE 19–17
(a) Raw Materials account: (5,000 – 4,650) X $15 = $5,250
Work in Process account: (4,600 X 10%) X $15 = $6,900
(b) To: Chief Accountant
From: Student
Subject: Statement Presentation of Accounts
Two accounts will appear in the income statement. Cost of Goods Sold
will be deducted from net sales in determining gross profit. Selling ex-
EXERCISE 19–18
(a) 3. Balanced scorecard
SOLUTIONS TO PROBLEMS
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Rent on factory equipment
Insurance on factory building
Raw materials
Utility costs for factory
Supplies for general office
$75,000
$11,000
1,500
900
(b) Total production costs
Direct materials $ 75,000
Direct labor 58,000
$25,100
(a)
Product Costs
Cost Item
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Period
Costs
Raw materials (1)
Wages for workers (2)
$111,000
$90,000
(1) $74 X 1,500 = $111,000.
(2) $12 X 5 X 1,500 = $90,000.
PROBLEM 19–3A
(a) Case 1
A = $9,600 + $5,000 + $8,000 = $22,600
$22,600 + $1,000 – B = $17,000
B = $22,600 + $1,000 – $17,000 = $6,600
Case 2
G + $8,000 + $4,000 = $16,000
G = $16,000 – $8,000 – $4,000 = $4,000
(Note: Item I can only be solved after item K is solved.)
J = $24,000 + $3,300 = $27,300
PROBLEM 19-3A (Continued)
(b) CASE 1
Cost of Goods Manufactured Schedule
Work in process, beginning …………………………... $ 1,000
Direct materials …………………………………………….. $9,600
(c) CASE 1
Income Statement
Sales revenue ………………………………………………. $24,500
Less: Sales discounts ………………………………….. 2,500
Net sales ………………………………………………………. $22,000
Cost of goods sold
CASE 1
(Partial) Balance Sheet
Current assets
Cash ……………………………………………………… $ 3,000
Receivables (net) ……………………………………. 15,000
PROBLEM 19–4A
(a) CLARKSON COMPANY
Cost of Goods Manufactured Schedule
For the Year Ended June 30, 2017
Work in process, July 1, 2016 ………… $ 19,800
Direct materials
Raw materials inventory,
July 1, 2016 ………………………… $ 48,000
Raw materials purchases ……….. 96,400
Total raw materials available
Manufacturing overhead
Plant manager’s salary …………… 58,000
Factory utilities ………………………. 27,600
Indirect labor …………………………. 24,460
PROBLEM 19-4A (Continued)
(b) CLARKSON COMPANY
(Partial) Income Statement
For the Year Ended June 30, 2017
Sales revenues
Sales revenue ……………………………………… $534,000
Less: Sales discounts…………………………. 4,200
(c) CLARKSON COMPANY
(Partial) Balance Sheet
June 30, 2017
Assets
Current assets
Cash …………………………………………………… $ 32,000
Accounts receivable ……………………………. 27,000
Inventories
PROBLEM 19–5A
(a) EMPIRE COMPANY
Cost of Goods Manufactured Schedule
For the Month Ended October 31, 2017
Work in process, October 1 ………….. $ 20,000
Direct materials
Raw materials inventory,
October 1 ………………………….. $ 18,000
Raw materials
Manufacturing overhead
Factory facility rent ……………….. 60,000
Depreciation on factory
equipment …………………………. 31,000
Indirect labor ………………………… 28,000
Factory utilities* ……………………. 9,000
Factory insurance** ……………….. 4,800
PROBLEM 19-5A (Continued)
(b) EMPIRE COMPANY
Income Statement
For the Month Ended October 31, 2017
Sales revenue …………………………………………… $780,000
Cost of goods sold
Operating expenses
Advertising expense …………………………... 90,000
Selling and administrative salaries ………. 75,000
Depreciation expense—sales