1. Consider the following account balances (in thousands) for the Kalinka Heavy Industries:

Kalinka Heavy Industries	Beginning of 2016	End of 2016
Direct materials inventory	$ 372,000	$ 219,000
Work-in-process inventory	519,000	435,000
Finished-goods inventory	720,000	618,000
Purchases of direct materials		786,000
Direct manufacturing labor		651,000
Indirect manufacturing labor		291,000
Plant insurance		27,000
Depreciationplant, building, and equipment		135,000
Plant utilities		78,000
Repairs and maintenanceplant		36,000
Equipment leasing costs		195,000
Marketing, distribution, and customer-service costs		375,000
General and administrative costs		213,000

Required:

1. Prepare a schedule for the cost of goods manufactured for 2016. (20 points)

Direct Materials Costs
Direct Labour
Manufacturing O/H
Total Cost of Production
Cost of the Goods Manufactured
Cost of the Goods Available for Sale
Cost of the Goods Sold

2. Sales (in thousands) for 2016 were $5,200,000. Prepare the income statement for 2016. (10 points)

Income Statement