PROBLEM 3–13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement LO3-3Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):Selling expenses$140,000Purchases of raw materials .$290,000Direct labor.Administrative expenses.$100,000Manufacturing overhead applied to work in process.$285,000Actual manufacturing overhead cost.$270,000Inventory balances at the beginning and end of the year were as follows:Beginning EndingRaw materials.$40,000 $10,000Work in process.? $35,000Finished goods..$50,000?The total manufacturing costs added to production for the year were $683,000; the cost of goods available for sale totaled $740,000; theunadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. The company's underapplied or overappliedoverhead is closed to Cost of Goods Sold.Required:Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement andschedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

Solution:- First we need to calculate schedule of cost of goods manufactured as follows under:-

Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

PROBLEM 3–13 Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement LO3-3
Superior Company provided the following data for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses
$140,000
Purchases of raw materials .
$290,000
Direct labor.
Administrative expenses.
$100,000
Manufacturing overhead applied to work in process.
$285,000
Actual manufacturing overhead cost.
$270,000
Inventory balances at the beginning and end of the year were as follows:
Beginning Ending
Raw materials.
$40,000 $10,000
Work in process.
? $35,000
Finished goods..
$50,000
?
The total manufacturing costs added to production for the year were $683,000; the cost of goods available for sale totaled $740,000; the
unadjusted cost of goods sold totaled $660,000; and the net operating income was $30,000. The company's underapplied or overapplied
overhead is closed to Cost of Goods Sold.
Required:
Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and
schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)

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