Question

Financial Statements of a Manufacturing Firm

Answer 1

Answer:

Required A.

Focault Inc.

Income Statement  For the Month Ended July 31

Revenues                                                        $1,120,000

Cost of Goods Sold                                         ($630,000)

Gross Profit                                                      $ 490,000

Selling and administrative expenses:

Selling Expenses                                           ($252,800)

Administrative Expenses                                ($100,000)

Income from Operations                               $137,2000

Required B

Materials inventory, July 31  =  $45,000

Work in process inventory, July 31  =  $36,000

Finished goods inventory, July 31 = $22,000

Explanation:

Raw Materials T - Account

Debit :

Purchases                    $320,000

Totals                           $320,000

Credit:

Used in Production     $275,000

Ending Balance             $45,000

Totals                           $320,000

Manufacturing Cost Schedule

Raw Materials                                               $275,000

Direct labor                                                   $236,000

Overheads ($236,000 × 75%)                      $177,000

Total Manufacturing Cost                            $688,000

Less Cost Transferred to Finished Goods ($652,000)

Ending Work In Process                                 $36,000

Finished Goods T - Account

Debit :

Cost of Goods Manufactured                      $652,000

Totals                                                             $652,000

Credit :

Trading Account : Cost of Sales                 ($630,000)

Ending Balance                                               $22,000

Totals                                                             $652,000