The following data from the just completed year are taken from the accounting records of Mason Company:

Sales	$	655,000
Direct labor cost	$	87,000
Raw material purchases	$	135,000
Selling expenses	$	109,000
Administrative expenses	$	42,000
Manufacturing overhead applied to work in process	$	226,000
Actual manufacturing overhead costs	$	205,000

Inventories	Beginning		Ending
Raw materials	$	9,000	$	10,800
Work in process	$	5,900	$	20,200
Finished goods	$	80,000	$	26,000

Required:

1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

3. Prepare an income statement.

Required 1Required 2Required 3 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.

Mason Company
Schedule of Cost of Goods Manufactured
Manufacturing overhead cost
Direct materials:
Beginning raw materials inventory
Add: Purchases of raw materials
Total raw materials available
Less: Ending raw materials inventory
Direct materials used in production
Direct labor
Manufacturing overhead
Work in process
Total manufacturing costs added to production			0
Total manufacturing costs to account for			0
Less: Ending work in process inventory
Cost of goods manufactured

• Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold.

  Mason Company
  Schedule of Cost of Goods Sold
  Beginning finished goods inventory
  Add: Cost of goods manufactured
  Cost of goods available for sale
  Less: Ending finished goods inventory
  Unadjusted cost of goods sold
  Add: Cost of goods manufactured
  Adjusted cost of goods sold

• Prepare an income statement.

  Mason Company
  Income Statement
  Sales
  Cost of goods sold
  Gross margin		0
  Selling and administrative expenses:
  Selling expenses
  Administrative expense
  		0
  Net operating income		$0