Below are financial statements for Yvonnes Fashion Company (The Company) for the year ended December 31, 2020 prepared by the companys inexperienced accountant.

Yvonnes Fashion Company

Statement of Cost of Goods Manufactured

at December 31, 2020

Direct materials purchased $90,000

Direct manufacturing labor 53,000

Manufacturing overhead:

Indirect manufacturing labor costs.. $18,000

Research and development expense. 3,900

Indirect materials. 3,000

Loss on sale of investments. 1,600

Factory rent . 15,000

Factory insurance ... 4,200

Factory equipment 46,000

Factory utilities ..... . 4,800

Prepaid janitorial services... 2,500

Restructuring costs. 10,000

Factory wages payable . (6,000)

Other indirect manufacturing costs. 2,000

Total manufacturing overhead 105,000

Cost of goods manufactured. $248,000

Yvonnes Fashion Company.

Income Statement

at December 31, 2020

Revenues:

Sales revenue .. $300,000

Retained earnings 1,450

Salaries payable.. 850

Dividend revenue. 500

Allowance for doubtful accounts. 800

Unearned revenue. 600

Sales commission payable 700

Interest revenue. 900

Total revenues.. 305,800

Less: Cost of goods manufactured.. (248,000)

Gross profit .. 57,800

Operating expenses:

Administrative expense. 28,000

Selling expense .. 33,000

Investments 6,000 Prepaid advertising. 2,500

Dividend paid 200

Interest expense 300

Loss on sale of equipment 1,300

Total operating expenses .. 71,300

Net loss .. . $(13,500)

The accountant did not take the following items into consideration when preparing the statements for 2020:

a. Factory equipment was purchased January 1, 2020 and has a useful life of 10 years with $3,200 salvage (residual) value. The company uses the double-declining balance method of depreciation.

b. Inventory balances for 2020 are:

January 1, 2020 December 31, 2020

Direct materials.. $3,300 $5,400

Finished goods 29,500 23,200

Work-in-process . 11,100 7,250

Required:

1. In reviewing the financial statements prepare a correct statement of cost of goods manufactured for the Year ended December 31, 2020.
2. Also, prepare a correct multiple-step income statement for the year ended December 31, 2020.