PLEASE COMPLETE THE INCOME STATEMENT SCHEDULE OF COST OF GOODS MANUFACTURES SHOW YOUR WORK Veekay Company was organized on November 1 of the previous year After seven months of start up losses, management had expected to earn a profit during June, the most recent month Management was disappointed, however, when the income statement for June also showed a loss Junes income statement follows VEEKAY COMPANY Income Statement For the Month Ended June 30 Sales $ 757,500 Less operating expenses Selling and administrative salaries $ 44,200 Rent on facilities 53,000 Purchases of raw materials 248,000 Insurance 11,300 Depreciation, sales equipment 12,950 Utilities costs 65,400 Indirect labour 129,400 Direct labour 108,100 Depreciation, factory equipment 15,600 Maintenance, factory 9,300 Advertising 95,800 793,050 Operating loss $ (35,550 ) After seeing the $35,550 loss for June, Veekays president stated, I was sure wed be profitable within six months, but after eight months were still spilling red ink Maybe its time for us to throw in the towel To make matters worse, I just heard that Debbie wont be back from her surgery for at least six more weeks Debbie is the companys controller in her absence, the statement above was prepared by a new assistant who has had little experience in manufacturing operations Additional information about the company follows Only 85 of the rent on facilities applies to factory operations the remainder applies to selling and administrative activities Inventory balances at the beginning and end of June were as follows June 1 June 30 Raw materials $20,300 $51,850 Work in process $78,950 $98,550 Finished goods $23,560 $73,410 VEEKAY COMPANY Schedule of Cost of Goods Manufactured For the Month Ended June 30 Direct materials 20,300 2$ Raw materials inventory, June 1 248,000 Add Purchases of raw materials Raw materials available for use 268,300 Deduct Raw materials inventory, June 30 51,850 Raw materials used in production 216,450 Direct labour 108,100 Manufacturing overhead Indirect labour Utilities Insurance Maintenance, factory Rent on facilities Depreciation, factory equipment Total overhead costs Total manufacturing costs Add Work in process inventory, June 1 324,550 324,550 Deduct Work in process inventory, June 30 Cost of goods manufactured 324,550 24 24 2 As a second step, prepare a new income statement for the month VEEKAY COMPANY Income Statement For the Month Ended June 30 Sales Cost of goods sold Finished goods inventory, June 1 Add Cost of goods manufactured Goods available for sale Deduct Finished goods inventory, June 30 Gross margin Selling and administrative expenses Advertising Insurance Utilities Depreciation, sales equipment Rent on facilities Selling and administrative salaries Operating income 24

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PLEASE COMPLETE THE INCOME STATEMENT & SCHEDULE OF COST OF GOODS MANUFACTURES [SHOW YOUR WORK] Veekay Company was organized on November 1 of the previous

PLEASE COMPLETE THE INCOME STATEMENT & SCHEDULE OF COST OF GOODS MANUFACTURES [SHOW YOUR WORK]

Veekay Company was organized on November 1 of the previous year. After seven months of start-up losses, management had expected to earn a profit during June, the most recent month. Management was disappointed, however, when the income statement for June also showed a loss. Junes income statement follows:

VEEKAY COMPANY
Income Statement
For the Month Ended June 30
Sales			$	757,500
Less operating expenses:
Selling and administrative salaries	$	44,200
Rent on facilities		53,000
Purchases of raw materials		248,000
Insurance		11,300
Depreciation, sales equipment		12,950
Utilities costs		65,400
Indirect labour		129,400
Direct labour		108,100
Depreciation, factory equipment		15,600
Maintenance, factory		9,300
Advertising		95,800		793,050

Operating loss			$	(35,550	)

After seeing the $35,550 loss for June, Veekays president stated, I was sure wed be profitable within six months, but after eight months were still spilling red ink. Maybe its time for us to throw in the towel. To make matters worse, I just heard that Debbie wont be back from her surgery for at least six more weeks.

Debbie is the companys controller; in her absence, the statement above was prepared by a new assistant who has had little experience in manufacturing operations. Additional information about the company follows:

Only 85% of the rent on facilities applies to factory operations; the remainder applies to selling and administrative activities.
Inventory balances at the beginning and end of June were as follows:

	June 1	June 30
Raw materials	$20,300	$51,850
Work in process	$78,950	$98,550
Finished goods	$23,560	$73,410

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VEEKAY COMPANY Schedule of Cost of Goods Manufactured For the Month Ended June 30 Direct materials: 20,300 2$ Raw materials inventory, June 1 248,000 Add: Purchases of raw materials Raw materials available for use 268,300 Deduct: Raw materials inventory, June 30 51,850 Raw materials used in production 216,450 Direct labour 108,100 Manufacturing overhead: Indirect labour Utilities Insurance Maintenance, factory Rent on facilities Depreciation, factory equipment Total overhead costs Total manufacturing costs Add: Work in process inventory, June 1 324,550 324,550 Deduct: Work in process inventory, June 30 Cost of goods manufactured 324,550 %24 %24 2. As a second step, prepare a new income statement for the month. VEEKAY COMPANY Income Statement For the Month Ended June 30 Sales Cost of goods sold: Finished goods inventory, June 1 Add: Cost of goods manufactured Goods available for sale Deduct: Finished goods inventory, June 30 Gross margin Selling and administrative expenses: Advertising Insurance Utilities Depreciation, sales equipment Rent on facilities Selling and administrative salaries Operating income %24