Superior Company provided the following data for the year en

Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials) Selling expenses Purchases of raw materials Direct labor Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead cost 210,080 $ 269,088 s 152,880 365,090 S352,088 Inventory balances at the beginning and end of the year were as follows: Beginning o s 50,880 38,000 s 35,ee8 YearEnd of Year Raw materials Work in process Finished goods S 33,080 The total manufacturing costs for the year were $690,000: the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold toteled $664,000: and the net operating income was $32.000. The company\'s underapplied or overapplied overheadi closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured ?nd cost of goods sold and an income statement (Hint Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.) Complete this question by entering your answers in the tabs below. Income COGM COGS Statement Schedule Schedule Prepare an income statement for the year. Superior Company Income Statement

Solution

Schedule of Cost of Goods Manufactured Direct Materials: Raw Materials inventory,beginning 50,000 Add:purchases of raw materials 269,000 total raw materials available 319,000 Deduct:Raw materials inventory ,ending 30,000 Raw Materials used in production 289,000 Direct Labor 36,000 Manufacturing overhead Applied to WIP 365,000 total manufacturing costs 690,000 Add:Beginning work in process inventory 28,000 718,000 Deduct:Ending work in process inventory 33,000 Cost of goods manufactured 685,000 Schedule of Cost of Goods sold Finished goods inventory,beginning 35,000 Add:Cost of goods manuactured 685,000 Cost of goods available for sale 720,000 Deduct:Finished goods inventory,ending 56,000 Unadjusted cost of goods sold 664,000 less::overapplied overhead 13000 Adjusted cost of goods sold 651,000 Income statement Sales 1,045,000 cost of good sold 651,000 Gross margin 394,000 Selling and administrative expense Selling expenses 210,000 Administrative expense 152,000 362,000 Net operating income 32,000