Below is Salem Companys income statement for 2019 that was prepared by an inexperienced accountant. Salem Company Income Statement As of December 31, 2019 Revenues: Sales revenue .. $298,000 Wages payable.... 4,000 Gain on sale of investment.. 5,250 Deferred revenue. 2,500 Interest payable 1,000 Accumulated depreciation 8,000 Total revenues .. $318,750 Less operating expenses: Selling expenses. . $32,250 Research and development expense... 4,750 Prepaid advertising .. 3,000 Indirect manufacturing labor cost.. 16,200 Utilities expense... ..................... 10,200 Direct manufacturing labor cost. .. 41,000 Factory equipment, cost.. 40,000 Insurance expense.. 3,500 Restructuring costs.. 4,000 Direct materials purchased..... 93,000 Interest expense. 1,750 Rent expense.... .. 18,000 Other factory indirect costs. 3,000 Dividend paid. 1,500 Administrative expenses.. 40,400 Short-term investment . 17,000 Total operating expenses .. 329,550 Net operating loss .. ($10,800) a. Seventy percent (70%) of utilities expense and 80% of insurance expense are for factory operations. Add the remaining utilities and insurance expenses equally to selling expenses and administrative expenses. b. Sixty percent (60%) of the rent expense is associated with factory operations. Add the remaining rent expense equally to selling expenses and administrative expenses. c. Factory equipment was purchased January 1, 2018. It was estimated that the useful life of the equipment is 10 years and the residual value, $4,000. The $8,000 accumulated depreciation above is for 2018. No depreciation was charged for 2019. The company uses the double-declining balance method of depreciation. d. Inventory balances are: January 1, 2019 December 31, 2019 Direct materials $5,000 $6,600 Work-in-process .. $8,000 $10,000 Finished goods $25,000 $28,000 The president is disappointed with the results of operations and has asked you to review the income statement and make a recommendation as to whether the company should look for a buyer for its assets.

Required: 1. As one step in gathering data for the president, prepare a corrected Statement of Cost of Goods Manufactured for the year ended December 31, 2019