S Below is financial information for Colonial Company, (The Company) for the year ended December 31, 2019 prepared by its inexperienced accountant. Colonial Company. Income Statement at December 31, 2019 Revenues: Sales revenue... $298,000 Allowance for uncollectible accounts ... 800 Interest revenue..... 500 Dividend payable...... 2,200 Gain on sale of available-for-sale investment 1,500 Total revenues.... 303,000 Less: Cost of goods manufactured.... 228.000 Gross profit.. 74,200 Operating expenses: Selling expenses 42,000 Restructuring costs... 3,000 General and administrative exper 34,000 Short-term investments.. 5,000 Prepaid advertising..... 800 Interest expense....... 1,400 Total operating expenses... 86,200 Net loss $(12.000) Colonial Company Schedule of Cost of Goods Manufactured at December 31, 2019 $98,000 ... 45,000 Direct materials purchased.... Direct manufacturing labor.... Manufacturing overhead: Indirect materials....... Indirect manufacturing labor costs.................... Research and development expense ............... Factory rent ............ Factory insurance ................................. Factory equipment.................. Accumulated depreciation.................. Factory utilities ... Prepaid factory insurance ....................... Factory bonus payable .................. Other indirect manufacturing costs.......... Total manufacturing overhead....... Cost of goods manufactured............... $2,000 7,000 5,000 24,000 3,000 46,000 (9,200) 6,000 1,000 (3.000) 4,000 85,800 $228.800 The accountant did not take the following items into consideration when preparing the statements above. a. Factory equipment was purchased on July 1, 2018 and has a useful life of 5 years with $2,000 salvage (residual al The company uses the double declining-balance method of depreciation. b. Inventory balances for 2019 are: January 1, 2019 December 31, 2019 Direct materials.... S6,000 $7,000 Work-in-process ................ $8,000 $10,000 Finished goods .................. $25,000 $28,000 c. The company's tax rate is 21%. The company's president is disappointed with the results of operations and has hired your accounting firm to review the financial statements. Required: 1. As one step in gathering data for the president, prepare a revised schedule of cost of goods manufactured for the year ended December 31, 2019. Also, calculate the cost of producing one unit if the company produced 40,000 units in 2019 (round your answer to two decimal points) TOTTIR 2. As a second step, prepare a corrected multiple-step income statement for the year 2019. INSTRUCTIONS: A. This assignment must be completed in Excel. Handwritten work or late assignments will not be accepted. B. Grading of this project will be based on: 1. Accuracy of your schedule of cost of goods manufactured and income statement 2. Use of formulas, neatness and formatting of your Excel schedule of cost of goods manufactured and income statement
