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Homework answers / question archive / The following information is available for Tomlin Company
The following information is available for Tomlin Company. Raw materials inventory Work in process inventory January 1, 2020 2020 $21,000 13,500 December 31, 2020 $30,000 17,200 6 ???? ???????? ??????????? Emirates College of Technology We Prepare for Future Career sue 9/10/2014 Revision Date 25/06/2018 Ref No. ECT-ACAF-ACAFO-FRM.011 Individual Project 27,000 21,000 Finished goods inventory Materials purchased Direct labor Manufacturing overhead Sales revenue Selling expenses Administrative expenses $150,000 220,000 180,000 910,000 50,000 80,000 Required a. Determine cost of goods manufactured. (3 marks) b. Prepare an income statement (3 marks) c. Describe the differences between merchandising and manufacturing companies with respect to income statement and balance sheet. (3 marks)
a) Cost of goods manufactured:Amount $WIP Jan 1, 2013500add: RM Inv used:RM Jan 1, 2021000Add:Mat. Purchased150000Less:RM Jan 31, 2030000141000Direct Labor220000Manufacturing Overhead180000TotaL Manufacturing Costs554500Less: WIP Jan 31, 2017200Cost of Goods Manufactured537300b) Income Statement:Amount $Sales Revenue910000Less: COGS:FG Inv. Jan 1, 2027000Add: Cost of Goods Manuf.537300Less:FG Inv. Jan 31, 2021000Cost of goods sold543300Gross Profit366700Less:Selling expenses50000Less:Admin expenses80000Net Operating Income236700c) Differences:PointMerchandising CompanyManufacturing CompanyIncome StatementIncome statement do notIncome Statement starts withcontain the raw materialadjustment of raw materialsand production costs.and production costs to getthe Cost of goods manufactured.Balance SheetBalance Sheet contains onlyBalance Sheet contains thethe Merchandise inventoryInventory including raw-mat.,which are procured from theWIP and FG inventory.outside manufacturer.
