Problem 1 Morton Buildings is a manufacturer of steel buildings.

They close their books at the end of the month and prepare financial statements. The statement of cost of goods sold for April is below: Morton Buildings Statement of Cost of Goods Sold For the Month Ending April 30, 2016 ($000 omitted):

Inventory of Finished Goods, March 31 $ 50

Cost of Goods Manufactured $790

Cost of Goods Available for Sale $840

Less Inventory of Finished Goods, April 30 $247

Cost of Goods Sold $593

Of the utilities, 80% is for the manufacturing plant; the remaining 20% is for the sales and administrative building.

All rent is for the office building.

Property taxes are assessed on the manufacturing plant.

Of the insurance, 60% is related to manufacturing the steel; the remaining 40% is related to the sales and administrative functions.

Depreciation expense includes the following:

Manufacturing plant $20,000

Manufacturing equipment $30,000

Office equipment $ 4,000

Total $54,000

The company manufactured 7,825 tons of steel during May.

The inventory balances at May 31, follow:

Direct materials inventory $23,000

Work-in-process inventory $220,000

Finished goods inventory $175,000

Morton Buildings Account Balances, May 31, 2016 ($000 omitted)

Direct materials inventory (April 30) 28

Work-in-process inventory (April 30) 150

Finished goods inventory (April 30) 247

Sales 1,488.

Sales discounts 20

Other revenue 2

Purchases of direct materials 510

Direct labor 260

Indirect factory labor 90

Office salaries 122

Sales salaries 42

Utilities 135

Rent 9

Property taxes 60

Insurance 20

Depreciation 54

Interest expense 6

Freight-in for materials purchases 15

1. Prepare a statement of cost of goods manufactured for Morton Buildings for May.

2. Prepare an income statement for Morton Buildings for May.