Cost of Goods Sold, Income Statement Ellerson Company provided the following inf
ID: 2333469 • Letter: C
Question
Cost of Goods Sold, Income Statement Ellerson Company provided the following information for the last calendar year: Beginning inventory: Direct materials $68,000 Work in process 29,400 Finished goods 43,200 Ending inventory: Direct materials $70,400 Work in process 40,000 Finished goods 42,100 During the year, direct materials purchases amounted to $278,000, direct labor cost was $189,000, and overhead cost was $523,000. During the year, 100,000 units were completed. Last calendar year, Ellerson recognized revenue of $1,312,000 and had selling and administrative expenses of $204,600. Required: 1. What is the cost of goods sold for last year? $ 2. Prepare an income statement for Ellerson for last year. Ellerson Company Income Statement For the Year Ended December 31 $ $
Explanation / Answer
Solution:-
1. Cost of goods sold for last year:-
= ( $68,000 + $2,78,000 ) - $70,400
=3,46,000 - 70,400
= $2,75,600
= $2,75,600 + $189,000
= $4,64,600
$9,77,000
= (9,77,000 + 43,200) - 42,100
= $ 9,78,100
2.Income statement for Ellerson for last year:-
= 1.312,000 - 9,78,100
= $3,33,900
=3,33,900 - 204,600
= $1,29,300
Note:- As per chegg rule i have time limit to complete the answer ,that's why iam not answered for the complete answer in second question .if need that question also please upload it as a another question.
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Debit Credit Beginning inventory of direct materials (A) $68,000 Purchased of direct material (B) $2,78,000 Ending inventory of direct materials (C) $70,400 Direct material consumed (D) = (A + B) - C= ( $68,000 + $2,78,000 ) - $70,400
=3,46,000 - 70,400
= $2,75,600
Direct labor cost (E) $189,000 Prime cost (F) = D + E= $2,75,600 + $189,000
= $4,64,600
Overhead cost (G) $523,000 Beginnning WIP (H) $29,400 Ending WIP (I) $ 40,000 Cost of goodsb manufactured (J)$9,77,000
Beginning finished goods inventory (k) $ 43,200 Ending finished goods inventory (L) $42,100 Cost of goods sold =( J +K) - L= (9,77,000 + 43,200) - 42,100
= $ 9,78,100