Problem 9-3 (IAA)

Christian Company provided the following data for the current year:

Sales 8,000,000

Sales salaries 520,000

Advertising 120,000

Indirect labor 600,000

Delivery expense 160,000

Freight in 80,000

Depreciation - machinery 50,000

Factory taxes 130,000

Purchases 160,000

Direct labor 1,480,000

Factory supplies expense 120,000

Office supplies expense 30,000

Offce salaries 800,000

Factory superintendence 480,000

Doubtful accounts 100,000

Factory maintenance 150,000

Factory heat, light and power 220,000

Income tax expense 170,000

Inventory balances at the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows:

Finished goods 200,000 decrease

Goods in process 90,000 decrease

Raw materials 100,000 increase

Required:

1. An income statement for the current year using the "functional" method supported by a schedule of cost goods manufactured.
2. An income statement for the current year using the "natural" method.