Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May: 1 Rainier Company Yakima Company 2 Materials inventory, May 1 $281,960.00 $179,000.00 3 Materials inventory, May 31 (a) 178,000.00 4 Materials purchased 712,200.00 341,200.00 5 Cost of direct materials used in production 751,600.00 (a) 6 Direct labor 1,059,200.00 (b) 7 Factory overhead 325,800.00 180,400.00 8 Total manufacturing costs incurred in May (b) 1,032,000.00 9 Total manufacturing costs 2,677,600.00 1,475,500.00 10 Work in process inventory, May 1 541,000.00 443,500.00 11 Work in process inventory, May 31 452,000.00 (c) 12 Cost of goods manufactured (c) 1,025,500.00 13 Finished goods inventory, May 1 478,200.00 205,000.00 14 Finished goods inventory, May 31 495,400.00 (d) 15 Sales 4,144,000.00 1,671,000.00 16 Cost of goods sold (d) 1,053,500.00 17 Gross profit (e) (e) 18 Operating expenses 545,000.00 (f) 19 Net income (f) 382,900.00 Required: a. Determine the amounts of the missing items, identifying them by letter. b. Prepare Yakima Company’s statement of cost of goods manufactured for May. c. Prepare Yakima Company’s income statement for May.

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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Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of May:

1		Rainier Company	Yakima Company
2	Materials inventory, May 1	$281,960.00	$179,000.00
3	Materials inventory, May 31	(a)	178,000.00
4	Materials purchased	712,200.00	341,200.00
5	Cost of direct materials used in production	751,600.00	(a)
6	Direct labor	1,059,200.00	(b)
7	Factory overhead	325,800.00	180,400.00
8	Total manufacturing costs incurred in May	(b)	1,032,000.00
9	Total manufacturing costs	2,677,600.00	1,475,500.00
10	Work in process inventory, May 1	541,000.00	443,500.00
11	Work in process inventory, May 31	452,000.00	(c)
12	Cost of goods manufactured	(c)	1,025,500.00
13	Finished goods inventory, May 1	478,200.00	205,000.00
14	Finished goods inventory, May 31	495,400.00	(d)
15	Sales	4,144,000.00	1,671,000.00
16	Cost of goods sold	(d)	1,053,500.00
17	Gross profit	(e)	(e)
18	Operating expenses	545,000.00	(f)
19	Net income	(f)	382,900.00

	Required:
	a. Determine the amounts of the missing items, identifying them by letter.
	b. Prepare Yakima Company’s statement of cost of goods manufactured for May.
	c. Prepare Yakima Company’s income statement for May.

Expert Solution

Step 1: Introduction:

Cost of goods manufactured is the cost incurred on the making of the goods that are to be manufactured by the entity.

Cost of goods sold is the cost incurred on the making of the goods sold in the market.

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