Problema 3. Angler Company is a manufacturer of toys. Its controller, Joyce Rotzen, resigned in August 2005. An inexperienced assistant accountant has prepared the following income statement for the month of August 2005.

ANGLER COMPANY

Income Statement

For the Month Ended August 31, 2005

Sales (net) $ 675,000

Less: Operating expenses

Raw materials purchases $ 200,000

Direct labor cost 160,000

Advertising expense 75,000

Selling and administrative salaries 70,000

Rent on factory facilities 60,000

Depreciation on sales equipment 50,000

Depreciation on factory equipment 35,000

Indirect labor cost 20,000

Utilities expense 10,000

Insurance expense 5,000 685,000

Net loss $ (10,000)

Traduccin - Antes de agosto 2005 la compaa haba tenido buenas ganancias cada mes. El presidente de la compaa tiene cierta receptividad acerca de la exactitud de los estados financieros. Como un amigo del presidente este te solicita que revises las correcciones necesarias. Despus de examinar otros datos de costo de manufactura tienes informacin incluida de los balances de inventario.

1. Inventory balances at the beginning and end of August were:

August 1 August 31

Raw materials $ 19,500 $ 30,000

Work in process 25,000 21,000

Finished goods 40,000 64,000

2. Only 60% of the utilities expense and 70% of the insurance expense apply to factory operations; the remaining amounts should be charged to the selling and administrative activities.

Instructions:

1. Prepare a cost of goods manufactured schedule for August 2005.
2. Prepare a correct income statement for August 2005.

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