Please help me add in the missing entries, there's a few in both tables that I'm not able to quite understand!
Problem 2-6 Preparing Financial Statements for a Manufacturer (LO5 - CC9, 10; LO6 - CC11, 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 $520,000 Sales Less: Operating expenses Indirect labour cost Utilities Direct labour cost Depreciation, factory equipment Raw materials purchased Depreciation, sales equipment Insurance Rent on facilities Selling and administrative salaries Advertising $ 16,200 15,500 75,000 23,000 207,000 18,000 4,600 50,000 46,000 71,700 527,000 Net loss $ (7,000) The company's controller resigned a month ago. Sam, a new assistant in the controller's office, prepared the income statement above. Sam has had little experience in manufacturing operations. After seeing the $7,000 loss for August, Swift's president stated, "l was sure we'd be profitable 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 assets-if 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 80% of the utilities cost and 75% of the insurance apply to factory operations. The remaining amounts apply to selling and administrative activities b. Inventory balances at the beginning and end of August were as follows Raw materials Work in process Finished goods August 1 August 31 $20,000 16,000 15,000 58,000 8,000 53,000 c. Only 75% 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 cost 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 inventory, August 1 Add: Purchase of raw materials Raw materials available for use Deduct: Raw materials inventory, August 31 Raw materials used in production Direct labour $20,000 207,000 227,000 16,000 $211,000 75,000 Manufacturing overhead: 16,200 Indirect labour Utilities Insurance Depreciation, factory equipment Rent on facilities 23,000 37,500 76,700 362,700 8,000 370,700 15,000 $355,700 Total overhead costs Total manufacturing costs Add: Work in process inventory, August 1 Deduct: Work in process inventory, August 31 Cost of goods manufactured
