Chapter 1 Problem 2-9
Christian Company
Statement of Cost of Goods Manufactured
Year Ended December 31, 2008
Purchases 1,600,000
Freight in 80,000
Total 1,680,000
Increase in raw materials ( 100,000)
Raw materials used 1,580,000
Direct labor 1,480,000
Factory overhead:
Indirect labor 600,000
Depreciation – machinery 50,000
Factory taxes 130,000
Factory supplies expense 120,000
Factory superintendence 480,000
Factory maintenance 150,000
Factory heat, light and power 220,000 1,750,000
Total manufacturing cost 4,810,000
Decrease in goods in process 90,000
Cost of goods manufactured 4,900,000
Christian Company
Income Statement
Year Ended December 31, 2008
Note
Sales revenue 8,000,000
Cost of goods sold (1) (5,100,000)
Gross income 2,900,000
Expenses:
Selling expenses (2) 800,000
Administrative expenses (3) 930,000 1,730,000
Income before tax 1,170,000
Income tax expense ( 170,000)
Net income 1,000,000
Note 1 – Cost of goods sold
Cost of goods manufactured 4,900,000
Decrease in finished goods 200,000
Cost of goods sold 5,100,000
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Note 2 – Selling expenses
Sales salaries 520,000
Advertising 120,000
Delivery expense 160,000
Total 800,000
Note 3 – Administrative expenses
Office supplies expense 30,000
Office salaries 800,000
Doubtful accounts 100,000
Total 930,000
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