Here is the problem: Poor Vibrations, Inc., produces recordings of musical performance. A newly hired executive of the company has asked you to sort through the records and prepare a statement of the company's cost of goods manufactured. You find the following data from records prepared by Poor Vibrations, Inc., for the year ended December 31, 2019: $10,000 $19.000 $18,600 $18,100 Inventories: Beginning Direct Materials Inventory, January 1, 2019 Ending Direct Materials Inventory, December 31, 2019 Beginning Work in Process Inventory, January 1, 2019 Ending Work in Process Inventory, December 31, 2019 Beginning Finished Goods Inventory, January 1, 2019 Ending Finished Goods Inventory, December 31, 2019 Materials Purchases Direct Labor Indirect Labor Factory Utilities Expense $37.000 $9,000 $90,000 $72,000 $28,400 $13,000 Factory Supplies Expense $9,200 Depreciation Expense--Factory Building $26,000 Depreciation Expense--Factory Equipment $18,600 Other Manufacturing Overhead $47,000 You also learn that sales for 2019 were $560,000, selling expenses were $92,000, and administrative expenses were $140,000. Required: A. Prepare a statement of cost of goods manufactured for Poor Vibrations for the year ended December 31, 2019. B. Ignoring income taxes for simplicity purposes, prepare an income statement for Poor Vibrations for the years ended December 31, 2019. A E 0 A 1 Poor Vibrations, Inc. Statement of Cost of Goods Manufactured For the Year Ended December 31, 2019 2 3 14 15 16 17 18 Direct Materials: Materials inventory, Jan. 1 Materials purchases Materials available Less: Materials inventory, Dec. 31 Direct materials used 19 20 21 22 Direct Labor 23 24 25 26 27 28 29 30 Manufacturing Overhead: Indirect labor Factory utilities expense Factory supplies expense Depreciation expense--factory building Depreciation expense--factory equipment Other manufacturing overhead Total manufacturing overhead Cost to manufacture Work in process inventory, Jan. 1 Work in process inventory, Dec. 31 Cost of goods manufactured 31 32 33 34 35 Sheet1 4 5 6 B 7 Poor Vibrations, Inc. Income Statement For the Year Ended December 31, 2019 8 9 0 51 52 53 54 Sales Cost of goods sold: Finished goods inventory, Jan. 1 Cost of goods manufactured Cost of goods available for sale Less: Finished goods inventory, Dec. 31 Cost of goods sold Gross Margin 55 56 57 58 59 60 61 62 63 Operating expenses: Selling expenses Administrative expenses Total operating expenses Income from operations (Net income) 64 65 66 67 68 69 70
