The following information is available for Shanika Company for 20Y6:

Inventories	January 1		December 31
Materials	$469,380		$577,340
Work in process	844,880		785,180
Finished goods	812,030		802,500

Advertising expense	$392,010
Depreciation expense-office equipment	55,420
Depreciation expense-factory equipment	74,480
Direct labor	889,100
Heat, light, and power-factory	29,440
Indirect labor	103,920
Materials purchased	871,780
Office salaries expense	304,260
Property taxes-factory	24,250
Property taxes-headquarters building	50,230
Rent expense-factory	40,990
Sales	4,081,790
Sales salaries expense	501,130
Supplies-factory	20,210
Miscellaneous costs-factory	12,700

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

844,880 For the Year Ended December 31, 2016 Work in process inventory, January 1, 2016 Direct materials: Materials inventory, January 1, 20Y6 469,380 Purchases 871,780 Cost of materials available for use 1,341,160 577,340 3,259,660 X 889,100 $ 103,920 889,100 X 29,400 x 24,250 Materials inventory, December 31, 2016 Cost of direct materials used in production Direct labor Factory overhead: Indirect labor Direct labor Heat, light, and power-factory Property taxes-factory Rent expense-factory Supplies-factory Miscellaneous costs-factory Total factory overhead Total manufacturing costs incurred in 2016 Total manufacturing costs Work in process inventory, December 31, 20Y6 40,990 20,210 12,700 3,259,660 X 7,408,420 x 7,408,420 X Cost of goods manufactured $ 2. Prepare the 2016 income statement. Shanika Company Income Statement For the Year Ended December 31, 2016 Cost of goods sold Cost of good sold: Finished goods inventory, January 1, 2046 Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, December 31, 2046 Cost of goods sold Gross profit Operating expenses: Administrative expenses: Office salaries expense Depreciation expense-factory equipment Property taxes-headquarters building Selling expenses: Advertising expense Sales salaries expense Total operating expenses Net loss