Lynn was reviewing the operating performance of Kollstead Co., a shoe manufacturer. She marveled at the numbers when she determined the company generated positive operating income of $258,000 last year, even after recognizing so many costs! In reviewing the many cost transactions, here is what she found. Total purchases of materials(leather,rubber and other services), 215,600. Marketing and advertising cost 33,400, Salaries and wages for sales, office staff, and executives 145,000, Utility costs for the factory 9,600, Comissions to the salespeople 12,300, Depreciation of factory and equipment 27,000, Factory supervisor salaries 65,800, Wages for factory workers 224,000, Insurance on the factory 15,800, Research and development 24,100 In addition, there were inventories on the balance sheet at the beginning and end of the year, both of which factored into the overall cost analysis as follows: RM Inventory Beginning $39,600 End $21,500, WIP Inventory Beginning $27,400 End $17,900, FG Inventory Beginning $22,600 End $8,600. Prepare a GAAP income statement for Kollstead, recognizing sales of $1,072,200 from its shoe business this year. How much gross margin did it earn? How much operating income did it earn?
Lynn was reviewing the operating performance of Kollstead Co., a shoe manufacturer. She marveled at the numbers when she determined the company generated positive operating income of $258,000 last year, even after recognizing so many costs! In reviewing the many cost transactions, here is what she found. Total purchases of materials(leather,rubber and other services), 215,600. Marketing and advertising cost 33,400, Salaries and wages for sales, office staff, and executives 145,000, Utility costs for the factory 9,600, Comissions to the salespeople 12,300,
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