Mc-Entire manufactures:

Sales for the year 698,000

Inventories at the beginning of the year

Finished goods 12,400

Work in process 13,800

Materials 9,400

Purchased raw material during year 220,000

Transportation In 5,000

Direct labor 107,350

Factory overhead 65% of labor cost --

Inventories at the end of the year

Finished goods 19,300

Work in process 15,200

Materials 10,900

Other expenses of the year

Marketing expense 12,730

Administrative expense 19,200

Depreciation of office equipment 5,500

Distribution cost 11,000

Requirement:

1. Prepare cost of goods sold statement
2. Prepare income statement