Reference no: EM132709892

Income Statement - Manufacturing The following accounts are gathered from the records of ABC Company for 2020:

Sales 7,500,000

Inventories - January 1

Raw Materials 200,000

Goods in Process 240,000

Finished Goods 360,000

Inventories - December 31

Raw Materials 280,000

Goods in Process 170,000

Finished Goods 300,000

Purchases 3,000,000

Direct Labor 950,000

Indirect Labor 250,000

Light, heat and water - factory building 320,000

Rent - factory building 120,000

Repair and maintenance - machinery 50,000

Factory supplies used 110,000

Sales salaries 400,000

Advertising 160,000

Depreciation - store equipment 70,000

Office salaries 150,000

Depreciation - office equipment 40,000

Depreciation - machinery 60,000

Sales returns and allowances 50,000

Interest income 10,000

Gain on sale of equipment 100,000

Delivery expenses 200,000

Accounting and legal expenses 150,000

Office expenses 250,000

Earthquake loss 300,000

Gain from expropriation of asset 100,000

Income tax expense 320,000

Rent for office space 60,000

One-half of the rented office space is occupied by the sales department and one-half is occupied by the administrative department.

Required:

Question 1. Compute the Cost of Goods Manufactured

Question 2. Compute the Net Income using the "cost of sales" method

Question 3. Compute the Net Income using the "nature of expense" method

Question 4. What amount should be reported as total distribution costs

Question 5. What amount should be classified as general and administrative expenses