Chapter 19, Problem 19WPCP

To determine

Cost of Goods Manufactured: The total of all the expenses incurred to produce or procure finished or ready to sell products is reported as cost of goods manufactured. It is listed on the income statement.

Income Statement: A part of financial statements that lists the income and expenses of business for an accounting year is called income statement. It is prepared at the end of accounting period to know the profitability of the business. All the expenses are listed on the debit side and the income or revenues are listed on the credit side. The difference of the both sides is called net profit or net loss.

Balance Sheet: Balance Sheet is a part of financial statements that lists company’s assets, liability and shareholders’ fund. It is prepared at the end of accounting period and informs about company’s financial position on that day.

To prepare: (a) An organizational chart, (b) The schedule of cost of goods manufactured, income statement and balance sheet.