Part One: In 2015, Pat Root opened Pat's Posies, a small retail shop selling floral arrangements. LOADING... (Click the icon to view the records.)Read the requirement (Part One) LOADING... .

Part Two: Pat's Posies was so successful that Pat decided to manufacture her own brand of floral supplies: Floral Mall Manufacturing. LOADING... (Click the icon to view the records.)Read the requirements (Part Two) LOADING... .

Part Three: Show the ending inventories that would appear on these balance sheets: LOADING... (Click the icon to view additional information.)

Part One:

Begin by calculating the cost of goods sold for the year.

Pat's Posies
Calculation of Cost of Goods Sold
For the Year Ended December 31, 2016
Beginning inventory		$12,100
Plus:	Purchases	39,000
Cost of goods available for sale		51,100
Less:	Ending inventory	9,600
Cost of goods sold		$41,500

Now prepare an income statement for

Pat's Posies,

a merchandiser, for the year ended December 31,

2016.

Pat's Posies
Income Statement
For the Year Ended December 31, 2016
	Sales revenue			$58,000
	Less:	Cost of goods sold		41,500
	Gross profit			16,500
	Less:	Operating expenses
		Utilities expense	$1,200
		Rent expense	4,400
		Sales commissions expense	5,000	10,600
	Operating income			$5,900

Part Two:

Requirement 1. Calculate the Cost of Goods Manufactured for

Floral Mall

Manufacturing for the year ended December 31,

2017.

Begin by calculating the direct materials used during the year.

Floral Mall Manufacturing
Calculation of Direct Materials Used
For the Year Ended December 31, 2017
Beginning raw materials inventory		$12,000
Plus:	Purchases of direct materials	31,000
Materials available for use		43,000
Less:	Ending raw materials inventory	7,000
Direct materials used		$36,000

Calculate the Cost of Goods Manufactured for

Floral Mall

Manufacturing for the year ended December 31,

2017.

(For accounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

Floral Mall Manufacturing
Calculation of Cost of Goods Manufactured
For the Year Ended December 31, 2017
Beginning work in process inventory		$0
Plus:	Manufacturing costs incurred
	Direct materials used	$36,000
	Direct labor	29,000
	Manufacturing overhead	15,550
Total manufacturing costs to account for		80,550
Less:	Ending work in process inventory	2,000
Cost of goods manufactured		$78,550

Requirement 2. Prepare an income statement for

Floral Mall

Manufacturing for the year ended December 31,

2017.

Begin by calculating the cost of goods sold for the year. (For accounts with a $0 balance, make sure to enter "0" in the appropriate cell.)

Floral Mall Manufacturing
Calculation of Cost of Goods Sold
For the Year Ended December 31, 2017
Plus:
Less: