Below is financial information for Campus Fashion Inc. (The Company) for the year ended December 31, 2016 prepared by its inexperienced accountant.

Campus Fashion Inc. Income Statement at December 31, 2016 Revenues: Sales revenue .. $300,000 Sales commission payable.. 1,000 Interest revenue 500 Gain on sale of office equipment . 1,500 Total revenues.. 303,000 Less: Cost of goods manufactured.. 238,000 Gross profit .. 65,000 Operating expenses: Selling ... .. 40,000 General and administrative .. 30,000 Short-term investments.. 5,000 Dividend paid 600 Interest expense 1,400 Total operating expenses .. 77,000 Net loss .. . $(12,000)

Campus Fashion Inc. Schedule of Cost of Goods Manufactured at December 31, 2016

Direct materials purchased $98,000 Direct manufacturing labor 45,000 Manufacturing overhead: Indirect materials. $2,000 Indirect manufacturing labor costs.. 7,000 Research and development .. 5,000 Factory rent . 24,000 Factory insurance ... 3,000 Factory equipment 46,000 Factory utilities ..... . 6,000 Prepaid factory insurance ... 1,000 Factory bonus payable . (3,000) Other indirect manufacturing costs. 4,000 Total manufacturing overhead 95,000 Cost of goods manufactured. $238,000

The accountant did not take the following items into consideration when preparing the statements above. a. Factory equipment was purchased on July 1, 2016 and has a useful life of 5 years with $2,000 salvage (residual) value. The company uses the straight-line method of depreciation b. Inventory balances for 2016 are: January 1, 2016 December 31, 2016 Direct materials.. $7,000 $6,000 Work-in-process . $10,000 $8,000 Finished goods $28,000 $25,000 The companys tax rate is 20% The companys president is disappointed with the results of operations and has hired your accounting firm to review the financial statements.

Required: As one step in gathering data for the president, prepare a revised schedule of cost of goods manufactured for the period ended December 31, 2016. As a second step, prepare a corrected multiple-step income statement for the year ended December 31, 2016.

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