Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company The following information is available for Shanika Company for 20Y6: Inventories January 1 December 31 Materials $279,830 $341,390 Work in process 503,690 464,290 Finished goods 484,110 474,530 Advertising expense $231,800 Depreciation expense-office equipment 32,770 Depreciation expense-factory equipment 44,040 Direct labor 525,740 Heat, light, and power-factory 17,410 Indirect labor 61,450 Materials purchased 515,500 Office salaries expense 179,910 Property taxes-factory 14,340 Property taxes-headquarters building 29,700 Rent expense-factory 24,240 Sales 2,413,630 Sales salaries expense 296,330 Supplies-factory 11,950 Miscellaneous costs-factory 7,510 Required: 1. Prepare the statement of cost of goods manufactured. Shanika Company Statement of Cost of Goods Manufactured For the Year Ended December 31, 2016 Work in process inventory, January 1, 2016 $ 355,660 X Direct materials: Materials inventory, January 1, 2016 $ 197,590 Purchases 364,000 Cost of materials available for use $ 561,590 241,060 Less materials inventory, December 31, 2016 x Cost of direct materials used 320,530 Direct labor 371,230 Factory overhead: Indirect labor $ Depreciation expense-factory equipment 43,390 31,100 12,290 X x x Heat, light, and power-factory Property taxes-factory 10,120 Rent expense-factory 17,120 x Supplies-factory 8,440 Miscellaneous costs-factory 5,300 x Total factory overhead 127,760 819,520 Total manufacturing costs incurred Total manufacturing costs Less work in process inventory, December 31, 2016 $ 1,175,180 327,840 x Cost of goods manufactured 847,340 x 2. Prepare the income statement. Shanika Company Income Statement For the Year Ended December 31, 2046 Sales $ 1,704,290 x Cost of goods sold: Finished goods inventory, January 1, 2016 $ 341,830 X Cost of goods manufactured 847,340 Cost of finished goods available for sale $ 1,189,170 Less finished goods inventory, December 31, 2016 335,070 X Cost of goods sold 834,100 X Gross profit 870,190 x Operating expenses: Administrative expenses: Office salaries expense $ 127,040 x 23,140 x Depreciation expense-office equipment Property taxes-headquarters building 20,970 X $ 171,150 X Selling expenses: Advertising expense $ 163,680 x 209,240 x Sales salaries expense 372,920 Total operating expenses Net income 544,070 326,120 x x