Problem 14-5A Empire Company is a manufacturer of smart phones.Its controller resigned in October...

50.1K

Verified Solution

Question

Accounting

Problem 14-5A Empire Company is a manufacturer of smart phones.Its controller resigned in October 2017. An inexperienced assistantaccountant has prepared the following income statement for themonth of October 2017. EMPIRE COMPANY Income Statement For theMonth Ended October 31, 2017 Sales revenue $ 794,800 Less:Operating expenses Raw materials purchases $ 264,900 Direct laborcost 189,100 Advertising expense 91,500 Selling and administrativesalaries 77,600 Rent on factory facilities 61,600 Depreciation onsales equipment 45,000 Depreciation on factory equipment 32,900Indirect labor cost 30,000 Utilities expense 13,000 Insuranceexpense 9,100 814,700 Net loss $( 19,900 ) Prior to October 2017,the company had been profitable every month. The company’spresident is concerned about the accuracy of the income statement.As her friend, you have been asked to review the income statementand make necessary corrections. After examining other manufacturingcost data, you have acquired additional information as follows. 1.Inventory balances at the beginning and end of October were:October 1 October 31 Raw materials $ 19,000 $ 36,000 Work inprocess 20,700 14,500 Finished goods 31,000 53,600 2. Only 75% ofthe utilities expense and 60% of the insurance expense apply tofactory operations. The remaining amounts should be charged toselling and administrative activities.
1. Prepare a schedule of cost of goods manufactured for October2017. (Round answers to 0 decimal places, e.g. 125.)
2. Prepare a correct income statement for October 2017.

Answer & Explanation Solved by verified expert

4.4 Ratings (755 Votes)

Schedule of cost of goods manufactured For the month of October 2017 Begining raw materials inventory 19000 Add Raw materials purchases 264900 Less Ending raw materials inventory 36000 Raw materials See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingProblem 14-5A Empire Company is a manufacturer of smart phones.Its controller resigned in October 2017....Problem 14-5A Empire Company is a manufacturer of smart phones.Its controller resigned in October 2017. An inexperienced assistantaccountant has prepared the following income statement for themonth of October 2017. EMPIRE COMPANY Income Statement For theMonth Ended October 31, 2017 Sales revenue $ 794,800 Less:Operating expenses Raw materials purchases $ 264,900 Direct laborcost 189,100 Advertising expense 91,500 Selling and administrativesalaries 77,600 Rent on factory facilities 61,600 Depreciation onsales equipment 45,000 Depreciation on factory equipment 32,900Indirect labor cost 30,000 Utilities expense 13,000 Insuranceexpense 9,100 814,700 Net loss $( 19,900 ) Prior to October 2017,the company had been profitable every month. The company’spresident is concerned about the accuracy of the income statement.As her friend, you have been asked to review the income statementand make necessary corrections. After examining other manufacturingcost data, you have acquired additional information as follows. 1.Inventory balances at the beginning and end of October were:October 1 October 31 Raw materials $ 19,000 $ 36,000 Work inprocess 20,700 14,500 Finished goods 31,000 53,600 2. Only 75% ofthe utilities expense and 60% of the insurance expense apply tofactory operations. The remaining amounts should be charged toselling and administrative activities.1. Prepare a schedule of cost of goods manufactured for October2017. (Round answers to 0 decimal places, e.g. 125.)2. Prepare a correct income statement for October 2017.