Hayward Manufacturing Company started 2018 with the following balances in its inventory accounts: Raw Materials, $3,000; Work in Process, $3,600; Finished Goods, $3,960. During 2018, Hayward purchased $20,400 of raw materials and issued $19,800 of materials to the production department. It incurred $22,800 of direct labor costs and applied manufacturing overhead of $22,440 to Work in Process Inventory. Assume there was no over- or under applied overhead at the end of the year. Hayward completed goods costing $63,000 to produce and transferred them to finished goods inventory. During the year, Hayward sold goods costing $60,840 for $92,280. Selling and administrative expenses for 2018 were $21,600.
Required
a. Using T-accounts, determine the ending balance Hayward would report for each of the three inventory accounts that would appear on the December 31, 2018, balance sheet.
b. Prepare the 2018 schedule of cost of goods manufactured and sold and the 2018 income statement.