Understanding manufacturing income statements Following is the income statement of the Bolinski Company. It was prepared by a new accountant who has had no experience with manufacturing businesses. The owner of the company is certain that there are a number of errors in the statement, and you are called in to analyze the statement and supporting accounting records.

Your analysis of the data indicates that all the account balances used in the income statement are correct. In addition, you find that the following accounts did not appear in any of the financial reports:

You also computed the cost of goods manufactured in 1992 to be $519,900.

REQUIRED REQUIRED Prepare a new income statement for the Bolinski Company using the additional data.

Transcribed Image Text:

Sales........ Less cost of goods sold: BOLINSKI COMPANY Income Statement For The Year Ended December 31, 1992 Beginning work in process inventory, 1/1/92. Add raw materials purchases for 1992 .. Total goods available for sale ...... Less ending raw materials inventory, 12/31/92. Gross margin Less operating expenses: Sales salaries...... Sales commissions Depreciation of office facilities $ 56,200 289,300 $345,500 $968,000 43,700 301,800 $666,200 $ 56,900 36,700 32,000 Depreciation of office equipment 14,600 Insurance (60% on production facilities) 12,000 Office supplies ..... 6,400 Utilities (75% for manufacturing operations) 27,600 Total operating expenses 186,200 Net income $480,000