Required information The following selected account balances

Required information The following selected account balances are provided for Delray Mfg Sales Raw materials inventory, Dec. 31, 2016 Work in process inventory, Dec. 31, $1,132,000 45,000 2016 Finished goods inventory, Dec. 31, 2016 Raw materials purchases Direct labor Factory computer supplies used Indirect labor Repairs-Factory equipment Rent cost of factory building Advertising expense General and administrative expenses 137,000 Raw materials inventory, Dec. 31, 2017 Work in process inventory, Dec. 31, 2017 Finished goods inventory, Dec. 31,73,500 2017 62,400 164, 600 235,000 17,800 57,000 5,250 50,000 91,000 48,800 41,300

Solution

Statement of Cost of Goods Manufactured and Sold Amount Amount Current manufacturing costs: Cost of materials placed in production: Opening Raw materials $               45,000 Add: Purchases $           1,64,600 Total Available $           2,09,600 Closing Raw materials $               48,800 $           1,60,800 Manufacturing Overhead Direct Labour $           2,35,000 Indirect Labour $               57,000 Factory computer Supplu used $               17,800 Rent - Factory Building $               50,000 Factory Repair and maintenance $                 5,250 $           3,65,050 Opening Work-in-process, $              53,700 Total costs in process $           5,79,550 Ending Work-in-process $              41,300 Cost of goods manufactured $           5,38,250 Add: Opening Finished Goods inventory $              62,400 Total Cost available for Sold $           6,00,650 Less: Closing Stock of Finished Goods $              73,500 Cost of Goods Sold $           5,27,150 Statement of Retained Earning Sales Revenue   $        11,32,000 Less: Cost of Goods Sold $           5,27,150 Gross Revenue $           6,04,850 Less: Operating Expenses Advertising 91000 General and administrative Expesnes 137000 Total Operating Expenses $           2,28,000 Operating Income $           3,76,850