Question

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May:
1 Rainier Company Yakima Company
2 Materials inventory, May 1 $100,000.00 $48,200.00
3 Materials inventory, May 31 (a) 50,000.00
4 Materials purchased 950,000.00 710,000.00
5 Cost of direct materials used in production 938,500.00 (a)
6 Direct labor 2,860,000.00 (b)
7 Factory overhead 1,800,000.00 446,000.00
8 Total manufacturing costs incurred May (b) 2,484,200.00
9 Total manufacturing costs 5,998,500.00 2,660,600.00
10 Work in process inventory, May 1 400,000.00 176,400.00
11 Work in process inventory, May 31 382,000.00 (c)
12 Cost of goods manufactured (c) 2,491,500.00
13 Finished goods inventory, May 1 615,000.00 190,000.00
14 Finished goods inventory, May 31 596,500.00 (d)
15 Sales 9,220,000.00 4,550,000.00
16 Cost of goods sold (d) 2,470,000.00
17 Gross profit (e) (e)
18 Operating expenses 1,000,000.00 (f)
19 Net income (f) 1,500,000.00
Required:
a. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
b. Prepare Yakima Company’s statement of cost of goods manufactured for May. For those boxes in which you must enter subtracted or negative numbers use a minus sign.*
c. Prepare Yakima Company’s income statement for May. Enter all amounts as positive numbers.*
* Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.
Starting Question
a. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
Letter Rainier Company Yakima Company
a.
b.
c.
d.
e.
f.
Statement of Cost of Goods Manufactured
b. Prepare Yakima Company’s statement of cost of goods manufactured for May. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Yakima Company
Statement of Cost of Goods Manufactured
For the Month Ended May 31
1
2
Direct materials:
3
4
5
6
7
8
9
10
11
Total manufacturing costs
12
13
c. Prepare Yakima Company’s income statement for May. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter all amounts as positive numbers.
Yakima Company
Income Statement
For the Month Ended May 31
1
2
Cost of goods sold:
3
4
5
6
7
8
9
10

Answer 1

Answer:

(a) $190,000

(b) $2,185,000

(c) $3,125,900

(d) $841,090

(e) $561,260

(f) $1,200,000

Explanation:

Rainier and Yakima Company several balances are omitted. These are calculated with reverse calculation. The material inventory at beginning of may is added with the purchases made and then ending inventory is subtracted to identify cost of goods manufactured.