Chapter 2 Sales Purchases of materials (1) Payroll (2) Advertising Administrative travel Manufacturing utilities Facility rental (3) Depreciation (4) Sales commissions Annual insurance (manufacturing) Office utilities Management salaries (5) Net income Notes: (1) 80% of the materials were direct (2) 70% direct labour, 30% indirect labour (3) 90% related to manufacturing (4) 75% related to manufacturing (5) 40% related to manufacturing $1,367,600 245,640 266,786 37,000 27,600 49.400 90,000 63,500 41,000 40.000 22.400 388.000 $ 96,274 Furthermore, Rosenthal compiled the following information with respect to inventories for the quarter (note that the company does not maintain inventories of indirect materials). Direct materials Work-in-progress Finished goods Beginning $ 6,870 8.070 11.280 Ending $7,860 9.120 7.420 Required: 1. Identify the conceptual errors, if any, in the quarterly income statement presented above. 2. Prepare a cost of goods manufactured statement for the quarter. 3. Prepare a revised income statement for the quarter. PROBLEM 2-10 Computing Income and cost of Goods Manufactured [LO5-CC9; L06 - CC12] Margaret Rosenthal, accountant for Russell Manufacturing Company, prepared the following income statement for the quarter ending December 31, 2019