Homework Help is Here – Start Your Trial Now!
Business
Accounting
account balances are provided for Delray Mfg.         Sales $ 1,250,000 Raw materials inventory, Dec. 31, 2016   37,000 Work in process inventory, Dec. 31, 2016   53,900 Finished goods inventory, Dec. 31, 2016   62,750 Raw materials purchases   175,600 Direct labor   225,000 Factory computer supplies used   17,840 Indirect labor

account balances are provided for Delray Mfg.         Sales $ 1,250,000 Raw materials inventory, Dec. 31, 2016   37,000 Work in process inventory, Dec. 31, 2016   53,900 Finished goods inventory, Dec. 31, 2016   62,750 Raw materials purchases   175,600 Direct labor   225,000 Factory computer supplies used   17,840 Indirect labor

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Question 6- Previously answered incorrectly (attached) 

 

The following selected account balances are provided for Delray Mfg.
 

     
Sales $ 1,250,000
Raw materials inventory, Dec. 31, 2016   37,000
Work in process inventory, Dec. 31, 2016   53,900
Finished goods inventory, Dec. 31, 2016   62,750
Raw materials purchases   175,600
Direct labor   225,000
Factory computer supplies used   17,840
Indirect labor   47,000
Repairs—Factory equipment   5,250
Rent cost of factory building   57,000
Advertising expense   94,000
General and administrative expenses   129,300
Raw materials inventory, Dec. 31, 2017   42,700
Work in process inventory, Dec. 31, 2017   41,500
Finished goods inventory, Dec. 31, 2017   67,300
 
### Delray Manufacturing Income Statement for Educational Purposes **Delray Mfg. Income Statement (For a Manufacturer) For the Year Ended December 31, 2017** **Sales:** - **Total Sales:** $1,250,000 **Cost of Goods Sold:** This section outlines expenses directly associated with manufacturing the goods sold by Delray Mfg. - **Subtotal of Cost of Goods Sold:** (Empty in the provided template) **Cost of Goods Available for Sale:** This value is presented but is zero in the provided template. - **Cost of Goods Available for Sale:** $0 **Operating Expenses:** This section includes various operational costs required to run the manufacturing processes. - **Direct Labor:** (Empty in the provided template) **Total Operating Expenses:** Sum of all operating expenses, but presented as zero in the provided template. - **Total Operating Expenses:** $0 **Operating Income:** This is calculated by subtracting total operating expenses from gross profit. - **Operating Income:** $0 #### Diagram Explanation: The provided image includes a structured template for an income statement, which is an accounting document summarizing financial performance over a specific period (in this case, the year ended December 31, 2017). Each category (Sales, Cost of Goods Sold, Operating Expenses, etc.) has its respective column where values can be input. The image represents a typical income statement structure used by manufacturers to track their financial performance. This template leaves most fields empty, indicating areas where detailed financial data should be entered by the user, typically derived from the company's internal financial records.
Transcribed Image Text:### Delray Manufacturing Income Statement for Educational Purposes **Delray Mfg. Income Statement (For a Manufacturer) For the Year Ended December 31, 2017** **Sales:** - **Total Sales:** $1,250,000 **Cost of Goods Sold:** This section outlines expenses directly associated with manufacturing the goods sold by Delray Mfg. - **Subtotal of Cost of Goods Sold:** (Empty in the provided template) **Cost of Goods Available for Sale:** This value is presented but is zero in the provided template. - **Cost of Goods Available for Sale:** $0 **Operating Expenses:** This section includes various operational costs required to run the manufacturing processes. - **Direct Labor:** (Empty in the provided template) **Total Operating Expenses:** Sum of all operating expenses, but presented as zero in the provided template. - **Total Operating Expenses:** $0 **Operating Income:** This is calculated by subtracting total operating expenses from gross profit. - **Operating Income:** $0 #### Diagram Explanation: The provided image includes a structured template for an income statement, which is an accounting document summarizing financial performance over a specific period (in this case, the year ended December 31, 2017). Each category (Sales, Cost of Goods Sold, Operating Expenses, etc.) has its respective column where values can be input. The image represents a typical income statement structure used by manufacturers to track their financial performance. This template leaves most fields empty, indicating areas where detailed financial data should be entered by the user, typically derived from the company's internal financial records.
### Financial Statement Analysis #### Particulars Breakdown - **Sales [A]**: - Amount: $1,250,000 - **Opening Inventory**: - Raw Materials: $37,000 - Work in Progress (WIP): $53,900 - Finished Goods (FG): $62,750 - **Subtotal [x]**: $329,250 - **Less Closing Inventory**: - Raw Materials: $42,700 - Work in Progress (WIP): $41,500 - Finished Goods (FG): $67,300 - **Subtotal [y]**: $151,500 - **Cost of Goods Sold (COGS) [x-y] [B]**: - Amount: $177,750 #### Operating Expenses - Direct Labour: $225,000 - Factory Computer Supplies: $17,840 - Indirect Labour: $47,000 - Repairs to Factory Equipment: $5,250 - Rent for Factory Building: $57,000 - Advertising: $94,000 - General & Administrative Expenses [C]: $129,300 - **Subtotal [C]**: $575,390 #### Operating Income Calculation - **Operating Income [A-B-C]**: - Amount: $496,860 ### Explanation of Financial Items **Sales [A]**: This represents the total revenue generated from sales, amounting to $1,250,000. **Inventory Breakdown:** - Opening Inventory: - Raw Materials, Work in Progress (WIP), and Finished Goods at the start of the accounting period. - Closing Inventory: - Raw Materials, Work in Progress (WIP), and Finished Goods at the end of the accounting period. **Cost of Goods Sold (COGS) [B]**: COGS is determined by subtracting the closing inventory from the total of opening inventory plus purchases, resulting in $177,750. **Operating Expenses**: These are the expenditures incurred in the regular operations of the business, which include direct labour, factory supplies, indirect labour, equipment repairs, factory rent, advertising, and general & administrative expenses, totaling $575,390. **Operating Income [A-B-C]**: This is the profit generated from operations, calculated by subtracting the cost of goods sold and operating expenses from the sales. The
Transcribed Image Text:### Financial Statement Analysis #### Particulars Breakdown - **Sales [A]**: - Amount: $1,250,000 - **Opening Inventory**: - Raw Materials: $37,000 - Work in Progress (WIP): $53,900 - Finished Goods (FG): $62,750 - **Subtotal [x]**: $329,250 - **Less Closing Inventory**: - Raw Materials: $42,700 - Work in Progress (WIP): $41,500 - Finished Goods (FG): $67,300 - **Subtotal [y]**: $151,500 - **Cost of Goods Sold (COGS) [x-y] [B]**: - Amount: $177,750 #### Operating Expenses - Direct Labour: $225,000 - Factory Computer Supplies: $17,840 - Indirect Labour: $47,000 - Repairs to Factory Equipment: $5,250 - Rent for Factory Building: $57,000 - Advertising: $94,000 - General & Administrative Expenses [C]: $129,300 - **Subtotal [C]**: $575,390 #### Operating Income Calculation - **Operating Income [A-B-C]**: - Amount: $496,860 ### Explanation of Financial Items **Sales [A]**: This represents the total revenue generated from sales, amounting to $1,250,000. **Inventory Breakdown:** - Opening Inventory: - Raw Materials, Work in Progress (WIP), and Finished Goods at the start of the accounting period. - Closing Inventory: - Raw Materials, Work in Progress (WIP), and Finished Goods at the end of the accounting period. **Cost of Goods Sold (COGS) [B]**: COGS is determined by subtracting the closing inventory from the total of opening inventory plus purchases, resulting in $177,750. **Operating Expenses**: These are the expenditures incurred in the regular operations of the business, which include direct labour, factory supplies, indirect labour, equipment repairs, factory rent, advertising, and general & administrative expenses, totaling $575,390. **Operating Income [A-B-C]**: This is the profit generated from operations, calculated by subtracting the cost of goods sold and operating expenses from the sales. The
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Discontinuing operations for a product or a service line
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS