The following information is available for Aikman Company. January 1, 2017
2017
December 31, 2017
Raw materials inventory $21,240 $32,930
Work in process inventory 16,990 18,070
Finished goods inventory 30,180 24,300
Materials purchased $154,190
Direct labor 224,280
Manufacturing overhead 184,560
Sales revenue 903,230
Compute cost of goods manufactured.
Aikman Company
Cost of Goods Manufactured Schedule
Prepare an income statement through gross profit.
AIKMAN COMPANY
Income Statement (Partial)
Show the presentation of the ending inventories on the December 31, 2017, balance sheet.
AIKMAN COMPANY
(Partial) Balance Sheet

Answer and Explanation:

The computation of cost of goods manufactured is shown below:-

Particulars                                       Amount

Work in process, Jan 1                    $16,990

Direct Materials

Materials inventory          $21,240  

Materials purchased       $154,190  

Materials available for use $175,430  

Less Materials Inventory,

Dec 31                               $32,930  

Direct Materials used                        $142,500

Direct Labor                                      $224,280

Manufacturing overhead                  $184,560

Total Manufacturing costs                $551,340

Total cost of Work in process          $568,330

Less Work in process, Dec 31        $18,070

Cost of Goods Manufactured         $550,260

The preparation of income statement through gross profit is shown below:-

AIKMAN COMPANY

Income Statement (Partial)

Particulars                                               Amount

Sales                                                        $903,230

Cost of Goods Sold  

Finished Goods, Jan 1            $30,180  

Cost of Goods Manufactured $550,260  

Cost of Goods Available

for Sale                                  $580,440  

Less Finished Goods, Dec 31 $24,300  

Total cost of goods sold                           $556,140

Gross Profit                                               $347,090

3. The presentation of the ending inventories on the December 31, 2017, balance sheet is shown below:-

AIKMAN COMPANY

(Partial) Balance Sheet

For the year ended Dec. 31, 2017

Current Assets

Inventories  

Finished Goods  $24,300  

Work in Process $18,070  

Raw Materials     $32,930       $75,300