Homework SourseSeveral items are omitted from the income statement and cost
Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May:
1
Rainier Company
Yakima Company
2
Materials inventory, May 1
$100,000.00
$48,200.00
3
Materials inventory, May 31
(a)
50,000.00
4
Materials purchased
950,000.00
710,000.00
5
Cost of direct materials used in production
938,500.00
(a)
6
Direct labor
2,860,000.00
(b)
7
Factory overhead
1,800,000.00
446,000.00
8
Total manufacturing costs incurred May
(b)
2,484,200.00
9
Total manufacturing costs
5,998,500.00
2,660,600.00
10
Work in process inventory, May 1
400,000.00
176,400.00
11
Work in process inventory, May 31
382,000.00
(c)
12
Cost of goods manufactured
(c)
2,491,500.00
13
Finished goods inventory, May 1
615,000.00
190,000.00
14
Finished goods inventory, May 31
596,500.00
(d)
15
Sales
9,220,000.00
4,550,000.00
16
Cost of goods sold
(d)
2,470,000.00
17
Gross profit
(e)
(e)
18
Operating expenses
1,000,000.00
(f)
19
Net income
(f)
1,500,000.00
Amount Descriptions
Starting Question
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a. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
Points:
4 / 12
Feedback
Check My Work
a. For Rainier Company: (Note: Use similar relationships to find the missing amounts for the Yakima Company items a through f.)
a. The beginning and ending materials inventory amounts and the amount of materials purchased are used in the calculation of the cost of direct materials used in production.
b. The three costs of a manufactured product are added to determine total manufacturing costs incurred during May.
c. The beginning and ending work in process amounts and the manufacturing costs incurred during May are used in the calculation of the cost of goods manufactured.
d. The beginning and ending finished goods amounts and the cost of goods manufactured are used in the calculation of the cost of goods sold.
e. Sales and one expense amount are used to determine gross profit.
f. Sales and expense amounts are used to determine net income.
Statement of Cost of Goods Manufactured
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b. Prepare Yakima Company’s statement of cost of goods manufactured for May. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Question not attempted.
Score: 0/100
Yakima Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31
1
2
Direct materials:
3
4
5
6
7
8
9
10
11
Total manufacturing costs
12
13
Points:
0 / 23
Feedback
Check My Work
b. The beginning and ending work in process amounts and the manufacturing costs incurred during May are used in the calculation of the cost of goods manufactured.
Income Statement
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c. Prepare Yakima Company’s income statement for May. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter all amounts as positive numbers.
Question not attempted.
Score: 0/76
Yakima Company
Income Statement
For the Month Ended May 31
1
2
Cost of goods sold:
3
4
5
6
7
8
9
10
Points:
0 / 18
Feedback
Check My Work
c. The beginning and ending finished goods amounts and the cost of goods manufactured are used in the calculation of the cost of goods sold. Sales and one expense amount are used to determine gross profit.
Sales and expense amounts are used to determine net income.
| 1 | Rainier Company | Yakima Company | |
| 2 | Materials inventory, May 1 | $100,000.00 | $48,200.00 |
| 3 | Materials inventory, May 31 | (a) | 50,000.00 |
| 4 | Materials purchased | 950,000.00 | 710,000.00 |
| 5 | Cost of direct materials used in production | 938,500.00 | (a) |
| 6 | Direct labor | 2,860,000.00 | (b) |
| 7 | Factory overhead | 1,800,000.00 | 446,000.00 |
| 8 | Total manufacturing costs incurred May | (b) | 2,484,200.00 |
| 9 | Total manufacturing costs | 5,998,500.00 | 2,660,600.00 |
| 10 | Work in process inventory, May 1 | 400,000.00 | 176,400.00 |
| 11 | Work in process inventory, May 31 | 382,000.00 | (c) |
| 12 | Cost of goods manufactured | (c) | 2,491,500.00 |
| 13 | Finished goods inventory, May 1 | 615,000.00 | 190,000.00 |
| 14 | Finished goods inventory, May 31 | 596,500.00 | (d) |
| 15 | Sales | 9,220,000.00 | 4,550,000.00 |
| 16 | Cost of goods sold | (d) | 2,470,000.00 |
| 17 | Gross profit | (e) | (e) |
| 18 | Operating expenses | 1,000,000.00 | (f) |
| 19 | Net income | (f) | 1,500,000.00 |
Solution
Statement of Cost of Goods Manufactured Rainier Company Yakima Company Direct Material Material Inventory, May 1 100,000.00 48,200.00 Material Purchased 950,000.00 710,000.00 Total Direct Material Available for Prouction 1,050,000.00 758,200.00 Less: Material Inventory, May 31 (111,500.00) (50,000.00) ($1,050,000 - $938,500) Cost of Direct Materials Used in Productions 938,500.00 708,200.00 Direct Labor 2,860,000.00 1,330,000.00 ($2,484,200 - $708,200 - $446,000) Factory Overhead 1,800,000.00 446,000.00 Total Manufacturing Costs incurred May 5,598,500.00 2,484,200.00 Add: WIP Inventory, May 1 400,000.00 176,400.00 Less: WIP Inventory, May 31 (382,000.00) (169,100.00) ($2,491,500 - $2,484,200 - $176,400) Cost of Goods Manufactured 5,616,500.00 2,491,500.00 Statement of Cost of Goods Sold Rainier Company Yakima Company Finished Goods Inventory, May 1 615,000.00 190,000.00 Cost of Goods Manufactured 5,616,500.00 2,491,500.00 Cost of Goods Available for Sale 6,231,500.00 2,681,500.00 Less: Finished Goods Inventory, May 31 (596,500.00) (211,500.00) $2,681,500 - $2,470,000 Cost of Goods Sold 5,635,000.00 2,470,000.00 Income Statement Rainier Company Yakima Company Sales 9,220,000.00 4,550,000.00 Less: Cost of Goods Sold (5,635,000.00) (2,470,000.00) Gross Profit 3,585,000.00 2,080,000.00 Less: Operating Expenses (1,000,000.00) (580,000.00) $2,080,000 - $1,500,000 Net Income 2,585,000.00 1,500,000.00
