Richmond Company
Statement of Cost of Goods Manufactured
For the month of October 2020
Raw materials inventory Oct 1	$20,000	Explanation or source document carry forward balance
Purchases	200,000	per purchase order
Raw materials inventory Oct 31	(50,000)	verify by making a physical count
Raw materials spoiled	(10,000)	evidenced by a journal voucher
Raw materials used	160,000	evidenced by requisition slips
Direct Labor	80,000	evidenced by time tickets
Applied factory overhead	120,000	estimated at 150% of labor
Total manufacturing costs	360,000	recorded total in the WIP
Work in Process Oct 31	(91,750)	Job Order Cost Sheet 103
Cost of goods manufactured	$268,250	Job Order Cost Sheets 101 and 102

Richmond Furniture Company Income Statement

For the month of October 2020

Sales $350,000

Cost of goods sold:

Cost of goods manufactured $268,250

Finished goods inventory Oct 31 (104,500) 163,750 Job Order 101 Gross Profit $186,250

Operating Expenses:

Selling:

Utilities $ 7,500

Sales Salaries 60,000

Advertising 20,000

Depreciation-Delivery Equipment 6,000 ( 93,500) Administrative:

Administrative Salaries $ 40,000 Depreciation Office Equipment 3,000

Utilities 7,500 ( 50,500)

Net Income $ 42,250

Richmond Furniture Company Statement of Financial Position As of October 31, 2020

Current Assets:

Finished Goods Inventory $104,500 not yet sold Work In Process Inventory 91,750 still in process Raw Materials Inventory 50,000 available for use

HOMEWORK:

To continue with the Richmond problem during the month of November 2020, the following documents were prepared:

1. Purchase order for Material B, $60,000.
2. Voucher prepared for payment of materials $20,000.
3. Two more jobs were accepted: Job 104 for 10 computer tables

Job 105 for 20 computer chairs

4. Material requisition slips:RS No 07 Job 103 Mat A $23,000

08 104 Mat B $24,000

09 105 Mat B $18,500

5. Payroll sheet showed the following

Time Cards for Job 103 $12,500 (Lima) 104 31,000 (Cruz)

105 34,500 (Ong)

Indirect Labor$40,000 (Supervisor)

Sales Salaries$60,000 (Salesmen/Delivery) Administrative Salaries$40,000 (Manager/Owner)

Other overhead incurred: Utilities$32,000(50% factory, sales and administrative equally)

Factory Equipment Depreciation$12,000 Office Equipment Depreciation$3,000 Delivery equipment Depreciation$6,000

6. Factory overhead applied based on 150% of labor cost .
7. Jobs 103 and 104 were finished. 105 will still be in process WIP end
8. Jobs 102 and 103 were delivered. 104 not yet delivered FG end

Required:

1. Prepare 2 cost sheets for Jobs 104 and 105. Open the cost sheet of Job 103, remember it has already a beginning balance for Materials, Labor and Overhead. Another line should be added to record the above transactions affecting this job. All jobs must have applied overhead.
2. From the cost sheets you prepared, determine the cost of goods manufactured and sold.
3. Determine the net income for the month of December.
4. List down the balances of the inventory accounts to be placed in the current asset section of the statement of financial position.