Q. 17-23E - Horngren'S Financial And Managerial Accounting

Question

Jordan Company has the following information for the year ended December 31, 2018. Use the information to prepare a schedule of cost of goods manufactured and an income statement. Assume no indirect materials are used and all amounts are shown in millions.

Inventory balances:	Beginning	Ending
Work-in-process	\(5	\)16
Finished goods	12	15

 

Other information:
Sales revenue	$253
Selling and administrative expenses	85
Direct labor	62
Manufacturing overhead; actual and allocated	20
Direct materials used	31

 

Step-by-Step Solution

Answer

The cost of goods manufactured by the company is $102 million and the net income is $69 million.

Cost of goods manufactured

Particulars	Amount ($ in million)
Beginning WIP inventory	5
Add: Direct labor	62
Add: Manufacturing overhead (actual and allocated)	20
Add: Direct material used	31
Less: Closing WIP inventory	16
Cost of goods manufactured	102

Income statement

Particulars	Amount ($ in million)
Net sales revenue	253
Less: Cost of goods sold:
Beginnnig finished goods inventory                          12
Add: cost of goods manufactured                              102
Less: Ending finished goods inventory                   (15)	99
Gross profit	154
Less: Selling and administrative expenses	85
Net Income	69