Complete by adding an x under the right columns.

CHAPTER 2 COST CONCEPTS 4 Review Problem 2: Schedule of Cost of Goods Manufactured and Income Statement The following information was taken from the aocounting records of Klcar-Scal Company for last year. Management wants these data erganised in a bellier Formst so that financial statoments can be peeparod for the year s165.000 Selling expenses Raw malerials inventorcy Jory Raw naterials inventory, December 3 Utilities, faclory Direct laboUE coS Depreciation, factory Parchases of raw materials Sales Insurance, factory Supplies, factory Administrative expenses Indirect labour Maintenance, factory Work-in-process inventory, January Work-in-process inventory, December 31 Pinished goods inventory,Jamuary 1 Pinished goods inventory, December 3 120.000 38.500 157,300 155,000 723,000 2,000 14,000 283,000 305,000 89,000 180,000 100,000 260,000 210,000 Required: 1. Prepare a schedule of cost of goods manufactared, similar to Exhibit 2-8 2. Compute the cost of goods sold 3. Using data as nceded from parts (I) and (2), prepare an income statement CHAPTER 2:COST CONCEPTS SOLUTION TO REVIEW PROBLEM 2 KLEAR-SEAL COMPANY Schecule of Cost of Goods Mantfactered Direct niateral Ra mateisls inveatory.anary Add:Purchases of raw materials Raw materials avnilable lor use Deduct: Ra naterials inveatory, December 3 Raw materials used io production Direct labour Manufacturing overbead Uilities, factory Depreciation, factory Insurance, factory Supplies, factory Indirect labour Maintenance, factory Total overhead costs Total manufacturing costs Add: Work-in-process inventory, January 1 Deduct: Work-in-process inventory, December 31 Cost of goods manufactured 2. The cost of goods sold would be comipoted as folo Finished goods iaventory, Januxy Add Coot of goods manufactore Good: availsble for sale Coct l goods sold KLEAR SEAL.COMPANY Income Statement For the Year Endcd Decraber 31 Sales Less: Cost of goods sold (sce above) Gross margin Less: Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net income