Question

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.

Answer 1

Answer:

Clarkson Company

Income statement for the year ended June 30, 2020

Sales Revenue                                                               $555,000

Less Costs of Goods Sold :

Opening Finished Goods Inventory            $96,100

Add Cost of Goods Manufactured            $390,520

Less Closing Finished Goods Inventory    ($19,900)  ($466,720)

Gross Profit                                                                       $83,280

Explanation:

First prepare a Schedule of Manufacturing Costs to determine the Cost of Goods Manufactured.

Schedule of Manufacturing Costs

Factory Insurance                                                      $4,700

Raw Materials ($48,100 + $96,500 - $39,700)    $104,900

Factory Machinery Depreciation                              $16,100

Factory Utilities                                                        $28,700

Direct Labor                                                            $139,350

Plant Manager’s Salary                                             $61,100

Indirect Labor                                                          $24,560

Factory Property Taxes                                             $9,610

Factory Repairs                                                          $1,500

Add Opening Work In Process Inventory              $19,900

Less Closing Work In Process Inventory              ($19,900)

Cost of Goods Manufactured                              $390,520