Hello, can someone please help me. I'm new to accounting and i'm having lots of trouble with this question. if you know, i would really appreciate your help
Problem 2- 6 Preparing Financial Statements for a Manufacturer ( LO5 - CC9, 10; LOG - CC 1 1 , 12) Swift Company was organized on March 1 of the current year . After five months of startup losses . management had expected to earn a profit during August , the most recent month . Management was disappointed , however , when the income statement for August also showed a loss . August's income statement follows :" SWIFT COMPANY Income Statement For the Month Ended August 31 Sales $ 535,000 Less : Operating Expenses*! Indirect labour cost 17, 100 Utilities 15, 500 Direct labour cost Depreciation , factory equipment 26,000 Raw materials purchased 216,000 Depreciation , sales Equipment 18,000 Insurance 5, 200 Rent on facilities 47, 000 Selling and administrative salaries 49, 000 Advertising 71, TOO 5:43.500 Net 105.5 ( 8, 50.0 )The company's controller resigned a month ago. Sam, a new assistant in the controller's ofce, prepared the income statement above. 5am has had little experience in manufacturing operations. After seeing the $0,500 loss for August, Swift's president stated, 'l was sure we'd be protable within six months, but our six months are up and this loss for August is even worse than July's. I think it's time to start looking for someone to buy out the company's assetsif we don't, within a few months there won't be any assets to sell. By the way, I don't see any reason to look for a new controller. We'll just limp along with Sam for the time being.\" Additional information about the company follows: a. Some 50% of the utilities cost and T503 of the insurance apply to factory operations. The remaining amounts apply to selling and administrative activities. 5. Inventory balances at the beginning and end of August were as follows: Augmt 1 Augum 31 Raw materials 5 23,000 5 19,000 Work in process 5,000 15,000 Finished goods 56,000 01,000 c. Only T593 of the rent on facilities applies to factory operations; the remainder applies to selling and administrative activities. The president has asked you to check over the income statement and make a recommendation about whether the company should look for a buyer for its assets. Required . 1 . As one step in gathering data for a recommendation to the president , prepare a schedule of cast of goods manufactured in good form for August . SWIFT COMPANY* Schedule of Cost of Goods Manufactured For the Month Ended August 31 Direct materials* Raw materials available for use Raw materials used in production* Manufacturing overhead :" Total overhead costs Total manufacturing costs Cost of goods manufactured2. As a second step , prepare a new income statement for August . SWIFT COMPANY* Income Statement For the Month Ended August 31 LESS cost of goods sold . Goods available for sale* LESS Operating EXPENSES :`
