Using the following information for Superior Manufacturing Company, prepare a manufacturing statement and an income statement for the year ended December 31, 2021. (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.

 

Using the following information for Superior Manufacturing Company, prepare a manufacturing statement and an income statement for the year ended December 31, 2021. (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, 2021……………………….	$20,000
Raw Materials Inventory December 31, 2021…………………..	40,000
Work in Process Inventory January 1, 2021…………………….	50,000
Work in Process Inventory December 31, 2021…………………	80,000
Finished Goods Inventory January 1, 2021...............................................................................................	120,000
Finished Goods Inventory December 31, 2021...............................................................................................	60,000
Administrative Expenses...............................................................................................	30,000
Selling Expenses...............................................................................................	60,000
Sales...............................................................................................	600,000
Raw Materials purchases during 2021……………………………	150,000
Direct Labor …………………………………………………………...	120,000
Factory Overhead (per separate schedule) ………………………	180,000

 

Chapter 1 Solution: Alternate Demo Problem

SUPERIOR MANUFACTURING COMPANY

Manufacturing Statement

For Year Ended December 31, 2021

Raw Materials Inventory, 1/1/21...........................................................................	$ 20,000
Raw Materials Purchases...........................................................................	150,000
Raw Materials Available for Use...........................................................................	170,000
Less Raw Materials Inventory, 12/31/21...........................................................................	40,000
Direct Materials...........................................................................		$130,000
Direct Labor…………………………………………		120,000
Factory Overhead...........................................................................		180,000
Total Manufacturing Costs...........................................................................		430,000
Add:  Work in Process Inventory 1/1/21...........................................................................		50,000
Total Work in Process Inventory...........................................................................		480,000
Less: Work in Process Inventory 12/31/21...........................................................................		80,000
Cost of Goods Manufactured...............................................   $ 400,000		$ 400,000

 

 

 

SUPERIOR MANUFACTURING COMPANY

Income Statement

For Year Ended December 31, 2021

Sales		$ 600,000
Cost of Goods Sold:
Finished Goods Inventory, 1/1/21..........................................................................	$140,000
Cost of Goods Manufactured..........................................................................	400,000
Cost of Goods Available for Sale..........................................................................	540,000
Finished Goods Inventory, 12/31/21..........................................................................	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