Question

The following data pertain to the operations of a manufacturing company for the year 2018

Item Amount (sh)

Sales revenues 1,000,000

Direct materials inventory, Jan 1, 2018 15,000

Direct labour 300,000

Depreciation, plant 60,000

Depreciation, equipment 40,000

Cutting tools used 10,000

Indirect labour 5,000

Factory lighting and power 10,000

Factory supervisors salary 50,000

Indirect materials 10,000

Finished goods inventory, Jan 1, 2018 30,000

Work in progress inventory, December 31, 2018 20,000

Office Supplies 10,000

Finished goods inventory, December 31, 2018 40,000

Direct materials inventory, December 31, 2018 25,000

Sales representatives salaries 250,000

Work in progress inventory, Jan 1, 2018 30,000

Purchases of direct materials 110,000

Factory supplies 5,000

Depreciation, administration office 50,000

Required; (a) Prepare a statement of the cost of goods manufactured

(b) Prepare an income statement for the company