Corporation is a private corporation formed for the purpose of providing the pro
ID: 2409088 • Letter: C
Question
Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial products, and private homes. It has a centrally located factory in a U.S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that provides installation and warranty servicing in six metropolitan areas. The month of November has just ended and Waterways needs to generate a cost of goods manufactured and cost of goods sold for its income statement for the month. The following data is provided:
Accounts Receivable
$ 290,000
Advertising Expense
52,000
Cash
255,000
Depreciation – Factory Equipment
17,500
Depreciation – Office Equipment
2,900
Direct Labor
44,000
Factory Supplies Used
16,300
Factory Utilities
10,500
Finished Goods Inventory – November 30
71,800
Finished Goods Inventory – October 31
73,500
Indirect Labor
45,000
Office Supplies Expense
1,900
Other Administrative Expenses
71,000
Prepaid Expenses
42,500
Raw Materials Inventory – November 30
53,000
Raw Materials Inventory – October 31
41,000
Raw Materials Purchases
186,500
Rent – Factory Equipment
45,000
Repairs – Factory Equipment
5,400
Salaries
335,000
Sales
1,425,000
Sales Commissions
42,750
Work In Process Inventory – November 30
44,000
Work In Process Inventory – October 31
51,000
Property Tax on Factory
5,500
Instructions:
a. From the above information, prepare a cost of goods manufactured schedule, an income statement, and the current asset section of the balance sheet for Waterways Corporation for the month of November.
Accounts Receivable
$ 290,000
Advertising Expense
52,000
Cash
255,000
Depreciation – Factory Equipment
17,500
Depreciation – Office Equipment
2,900
Direct Labor
44,000
Factory Supplies Used
16,300
Factory Utilities
10,500
Finished Goods Inventory – November 30
71,800
Finished Goods Inventory – October 31
73,500
Indirect Labor
45,000
Office Supplies Expense
1,900
Other Administrative Expenses
71,000
Prepaid Expenses
42,500
Raw Materials Inventory – November 30
53,000
Raw Materials Inventory – October 31
41,000
Raw Materials Purchases
186,500
Rent – Factory Equipment
45,000
Repairs – Factory Equipment
5,400
Salaries
335,000
Sales
1,425,000
Sales Commissions
42,750
Work In Process Inventory – November 30
44,000
Work In Process Inventory – October 31
51,000
Property Tax on Factory
5,500
Explanation / Answer
Waterways Corporation Statement of Cost of Goods Manufactured For the Month Ended Nov 30 Direct Material Raw Material Inventory, Oct-31 41,000.00 Raw Material Purchased 186,500.00 Total Direct Material Available for Prouction 227,500.00 Less: Raw Material Inventory, Nov 30 (53,000.00) Cost of Direct Materials Used in Productions 174,500.00 Direct Labor 44,000.00 Factory Overhead Depreciation - Factory Equipment 17,500.00 Factory Supplies Used 16,300.00 Factory Utilities 10,500.00 Indirect Labor 45,000.00 Rent - Factory Equipment 45,000.00 Repairs - Factory Equipment 5,400.00 Property Tax on Factory 5,500.00 145,200.00 Total Manufacturing Costs incurred 363,700.00 Add: WIP Inventory, Oct 31 51,000.00 Less: WIP Inventory, Nov 30 (44,000.00) Cost of Goods Manufactured 370,700.00 Waterways Corporation Statement of Cost of Goods Sold For the Month Ended Nov 30 Finished Goods Inventory, Oct-30 73,500.00 Cost of Goods Manufactured 370,700.00 Cost of Goods Available for Sale 444,200.00 Less: Finished Goods Inventory, Nov-30 (71,800.00) Cost of Goods Sold 372,400.00 Waterways Corporation Income Statement For the Month Ended Nov 30 Sales 1,425,000.00 Less: Cost of Goods Sold 372,400.00 Gross Profit 1,052,600.00 Less: Expenses Advertising Expense 52,000.00 Depreciation - Office Equipment 2,900.00 Office Supplies Expense 1,900.00 Other Administrative Expense 71,000.00 Salaries 335,000.00 Sales Commission 42,750.00 505,550.00 Net Income 547,050.00 Waterways Corporation Balance Sheet (Partial) As on Nov 30 Assets Current Assets Cash 255,000.00 Accounts Receivable 290,000.00 Inventory Raw Material 53,000.00 Work-in-Process 44,000.00 Fininshed Goods 71,800.00 168,800.00 Prepaid Expense 42,500.00 Total Current Assets 756,300.00