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Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):

  

  Selling expenses $ 216,000
  Purchases of raw materials $ 268,000
  Direct labor
?
  Administrative expenses $ 152,000
  Manufacturing overhead applied to work in process $ 337,000
  Total actual manufacturing overhead costs $ 357,000

Inventory balances at the beginning and end of the year were as follows:
   Beginning of Year End of Year
  Raw materials $ 58,000
$ 39,000
  Work in process
?
$ 31,000
  Finished goods $ 36,000

?

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $39,000. The company's overapplied or underapplied overhead is closed entirely to cost of goods sold.
Required:
a. Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values. Omit the "$" sign in your response.)
Valenko Company
Schedule of Cost of Goods Manufactured

                                                                                   Debit                                         Credit

Direct materials -

      Raw materials inventory

      Add : Purchases of raw materials   
  

       Total raw materials available -   
       Deduct : Raw materials inventory, ending   
  

Raw materials used in production -
  
  Direct labor
  
  Manufacturing overhead applied to work in process inventory
  
  

  Total manufacturing cost -
  
  Add : Beginning work in process inventory
  





  
Deduct: Ending work in process inventory
  
  

  Cost of goods manufactured

  


b.

Prepare a schedule of cost of goods sold. (Input all amounts as positive values. Omit the "$" sign in your response.)

Valenko Company
Schedule of Cost of Goods Sold

Credit
Finished goods inventory, beginning
  Add : Cost of goods manufactured   
  
  Cost of goods available for sale   
  Deduct : Finished goods inventory, ending   
  
  Unadjusted cost of goods sold   
  Add : Underapplied overhead   
  
  Adjusted cost of goods sold
  

c.

Prepare an income statement for the year. (Input all amounts as positive values. Omit the "$" sign in your response.)

Valenko Company
Income Statement

                                                                              Debit                                               Credit

Sales

Cost of goods sold
  



Gross margin
  
  Selling and administrative expenses -

  Selling expenses

Administrative expense      
  

  Net operating income

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9955235

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