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Basic Concepts.pdf

The document provides financial statements for Superior Manufacturing Company for the year ended December 31, 2015, including a manufacturing statement and an income statement. The manufacturing statement shows total manufacturing costs of $430,000 and cost of goods manufactured of $400,000. The income statement indicates a net income after taxes of $45,000, with sales totaling $600,000 and operating expenses of $90,000.

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3 views

Basic Concepts.pdf

The document provides financial statements for Superior Manufacturing Company for the year ended December 31, 2015, including a manufacturing statement and an income statement. The manufacturing statement shows total manufacturing costs of $430,000 and cost of goods manufactured of $400,000. The income statement indicates a net income after taxes of $45,000, with sales totaling $600,000 and operating expenses of $90,000.

Uploaded by

ssw ecpn
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Basic Concepts

Using the following information for Superior Manufacturing Company,


prepare a manufacturing statement and an income statement for the year
ended December 31, 2015. (Assume a 25% income tax.) Further assume
that all raw materials used were direct materials and the factory overhead
costs were totaled for you on a separate schedule.

Raw Materials Inventory January 1, 2015………………………. $20,000


Raw Materials Inventory December, 31, 2015………………….. 40,000
Work in Process Inventory January 1, 2015……………………. 50,000
Work in Process Inventory December 31, 2015………………… 80,000
Finished Goods Inventory January 1, 2015 ................................ 140,000
Finished Goods Inventory December 31, 2015 .......................... 90,000
Selling Expenses ........................................................................... 30,000
Administrative Expenses.............................................................. 60,000
Sales ............................................................................................... 600,000
Raw Materials purchases during 2015…………………………… 150,000
Direct Labor …………………………………………………………... 120,000
Factory Overhead (per separate schedule)……………………… 180,000
Solution: Basic Concepts

SUPERIOR MANUFACTURING COMPANY


Manufacturing Statement
For Year Ended December 31, 2015

Raw Materials Inventory, 1/1/15 ............................... $ 20,000


Raw Materials Purchases ......................................... 150,000
Raw Materials Available for Use .............................. 170,000
Less Raw Materials Inventory, 12/31/15 .................. 40,000
Direct Materials ..................................................... $130,000
Direct Labor………………………………………… 120,000
Factory Overhead ................................................. 180,000
Total Manufacturing Costs ....................................... 430,000
Add: Work in Process Inventory 1/1/15 .................. 50,000
Total Work in Process Inventory ............................. 480,000
Less: Work in Process Inventory 12/31/15 ............. 80,000
Cost of Goods Manufactured .................................. $ 400,000

SUPERIOR MANUFACTURING COMPANY


Income Statement
For Year Ended December 31, 2015

Sales $ 600,000
Cost of Goods Sold:
Finished Goods Inventory, 1/1/15 ............................ $140,000
Cost of Goods Manufactured ................................... 400,000
Cost of Goods Available for Sale............................. 540,000
Finished Goods Inventory, 12/31/15 ........................ 90,000
Cost of Goods Sold ................................................... 450,000
Gross Profit ................................................................ 150,000
Operating Expenses: ................................................
Selling Expenses ....................................................... 30,000
Administrative Expenses .......................................... 60,000
Total Operating Expense .......................................... 90,000
Income before Taxes…………………………………. 60,000
Income Tax Expense ................................................. 15,000
Net Income after Taxes ............................................. $ 45,000

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