Preparing an Income Statement Using the Cost of Finished Goods Manufactured
Valley Company reports the following information pertaining to its 2002 operating activities:
Work in Process Inventory40,00030,000
Finished Goods Inventory18,00022,000
During the year, the company purchased $42,000 of direct materials and incurred $32,000 of direct labor costs. Total manufacturing overhead costs for the year amounted to $20,000. Selling and administrative expenses amounted to $32,000, and the company’s annual sales amounted to $95,000
Prepare Ridgeway’s schedule of the cost of finished goods manufactured for 2002.
Prepare Ridgeway’s 2002 income statement (ignore income taxes).
16-10Alternate Problems for use with Financial and Managerial Accounting, 12e
© The McGraw-Hill Companies, 2002