Preparing an Income Statement Using the Cost of Finished Goods Manufactured
Sallyton Company, a sole proprietorship, reports the following information pertaining to its 2002 operating activities:
Work in Process Inventory33,00058,000
Finished Goods Inventory70,00060,000
During the year, the company purchased $40,000 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 $55,000, and the company’s annual sales amounted to $250,000
Prepare Sallyton’s schedule of the cost of finished goods manufactured for 2002.
Prepare Sallyton’s 2002 income statement (ignore income taxes).
Alternate Problems for use with Financial and Managerial Accounting, 12e16-9
© The McGraw-Hill Companies, 2002