Prepare a cost of goods manufactured schedule and a correct income statement.

Tombert Company is a manufacturer of computers. Its controller resigned in October 2016. An inexperienced assistant accountant has prepared the following income statement for the month of October 2016.

TOMBERT COMPANY Income Statement For the Month Ended October 31, 2016
Sales (net)		$780,000?
Less: Operating expenses
Raw materials purchases	$264,000
Direct labour cost	190,000
Advertising expense	90,000
Selling and administrative salaries	75,000
Rent on factory facilities	60,000
Depreciation on sales equipment	45,000
Depreciation on factory equipment	31,000
Indirect labour cost	28,000
Utilities expense	12,000
Insurance expense	8,000	803,000?
Net loss		$ (23,000)

Prior to October 2016, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As his friend, he has asked you to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired the following additional information.

Inventory balances at the beginning and end of October were as follows:

	October 1	October 31
Raw materials	$18,000	$29,000
Work in process	?16,000	?14,000
Finished goods	?30,000	?45,000

Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.

Instructions

Calculate the following:

(a)

Prepare a schedule of the cost of goods manufactured for October 2016.

CGM $577,800

(b)

Prepare a correct income statement for October 2016.

NI $1,000