Koufax Materials Corporation produces plastic products for home appliances and electronics. The financial department has produced the following information for the year ended December 31. Administrative salaries$2,627,000Depreciation on the administrative building 1,144,000Depreciation on the manufacturing plant 1,752,000Direct labor 4,694,500Direct materials inventory, January 1 1,071,200Direct materials inventory, December 31 1,237,000Direct materials purchased during the year 8,958,000Distribution costs 659,000Finished goods inventory, January 1 1,644,000Finished goods inventory, December 31 1,371,500Indirect labor 544,000Insurance (on manufacturing plant) 55,200Legal fees 498,300Maintenance (on the manufacturing plant) 217,400Manufacturing plant utiities 786,100Marketing costs 751,250Other manufacturing plant costs 632,880Sales revenue 22,656,920Taxes (on manufacturing plant and property) 217,600Work-in-process inventory, January 1 405,250Work-in-process inventory, December 31 398,700 Required:a. Prepare a cost of goods manufactured and sold statement.b. Prepare an income statement. **Prepare an income statement. (Loss amounts should be indicated with a minus sign.)****KOUFAX MATERIALS CORP.****Income Statement****For the Year Ending December 31**| | | ||-------------------------|-------------------------|-------------------------|| | | || | | || | | || | | || | | || | | || | | || | | || | | ||Total operating costs| | || | | |This template represents an income statement for Koufax Materials Corp. The statement is intended to summarize the revenues, expenses, and profit or loss of the company for the fiscal year ending on December 31. **Key elements in the income statement:**1. It starts with sections for listing different revenue sources and expenses.2. The final part involves calculating the total operating costs.3. The template includes placeholders for various financial entries and calculations, such as net income or net loss, which should be indicated with a minus sign if representing a loss.### Guide to filling out the income statement:1. **Revenue Sources**: - Enter each type of revenue the company earned during the year in the top rows.2. **Expenses**: - List all operating expenses including costs of goods sold, administrative expenses, and other operating expenses in the subsequent rows.3. **Total Operating Costs**: - Summarize the total operating costs by adding up all the listed expenses.4. **Calculate Net Income or Loss**: - Subtract the total operating costs from the total revenue to determine the net income or loss for the year. If the result is negative, it should be indicated with a minus sign.This statement is crucial for assessing the financial health of Koufax Materials Corp. and is typically utilized by stakeholders to make informed business decisions. ## Cost of Goods Manufactured and Sold Statement### For the Year Ending December 31#### Manufacturing costs:##### Direct materials:##### Manufacturing overhead:##### Total overhead#### Total manufacturing costs#### Total cost of work-in-process during the year#### Costs of goods manufactured this year#### Cost of goods available for sale#### Cost of goods sold (to income statement)---### Diagram Explanation:The image represents a "Cost of Goods Manufactured and Sold Statement" for a particular year ending on December 31. The statement includes several sections and figures that need to be filled in manually. The structure is as follows:1. **Manufacturing costs:** - **Direct materials:** This section is intended to list all costs associated with direct materials used in the manufacturing process. - **Manufacturing overhead:** This includes various costs (such as indirect materials, indirect labor, and other overhead costs) that need to be accounted for to determine the total manufacturing overhead.2. **Total overhead:** This line will sum up all the manufacturing overhead costs.3. **Total manufacturing costs:** This is the sum of direct materials cost and total overhead.4. **Total cost of work-in-process during the year:** This line accounts for the beginning inventory plus total manufacturing costs to get the total cost of work-in-process.5. **Costs of goods manufactured this year:** This is derived from the total cost of work-in-process by subtracting the ending work-in-process inventory.6. **Cost of goods available for sale:** This includes the cost of goods manufactured and any beginning finished goods inventory.7. **Cost of goods sold (to income statement):** This is derived by subtracting the ending finished goods inventory from the cost of goods available for sale, and is then transferred to the income statement.This statement helps in assessing the costs incurred in manufacturing and selling goods and determines the cost of goods sold for inclusion in the income statement.

Income statement is a statement which shows the summary of all expenditure and revenue of the…

Answered: Koufax Materials Corporation produces…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q


Administrative salaries	$	2,627,000
Depreciation on the administrative building		1,144,000
Depreciation on the manufacturing plant		1,752,000
Direct labor		4,694,500
Direct materials inventory, January 1		1,071,200
Direct materials inventory, December 31		1,237,000
Direct materials purchased during the year		8,958,000
Distribution costs		659,000
Finished goods inventory, January 1		1,644,000
Finished goods inventory, December 31		1,371,500
Indirect labor		544,000
Insurance (on manufacturing plant)		55,200
Legal fees		498,300
Maintenance (on the manufacturing plant)		217,400
Manufacturing plant utiities		786,100
Marketing costs		751,250
Other manufacturing plant costs		632,880
Sales revenue		22,656,920
Taxes (on manufacturing plant and property)		217,600
Work-in-process inventory, January 1		405,250
Work-in-process inventory, December 31		398,700