Reference no: EM133036409

Question - Xyz Inc. had the following balances as of 1/1/20X1:

Raw Materials: $19,000

Work in Process: $40,000

Finished Goods: $17,000

Indirect materials inventory: $2,000

Additional information:

a. Raw materials purchased on account was $65,000.

b. Raw materials of $57,000 were requisitioned for use in production. Indirect materials of $7,000 were requisitioned for use in production.

c. Accrual of factory wages $60,000; maintenance workers for the factory $15,000.

d. The following costs were incurred on the factory; utilities $21,000, equipment rental $16,000, and cable, internet, phone for the factory $3,000.

e. The accrual of property taxes on the factory was made in the amount of $15,000.

f. The expiration of prepaid medical insurance on factory workers was made in the amount of $10,000.

g. Depreciation was recorded on the factory equipment in the amount of $20,000.

h. ABC Company applies overhead costs based on machine hours worked. For 20X1 the company estimated that it will work 15,000 machine hours and incur $90,000 in manufacturing overhead costs. The journal entry is made to apply Manufacturing Overhead. A total of 15,500 machine hours have occurred.

i. The accrual of management salaries $23,000 and office staff salaries $9,000 was made.

j. Depreciation on office equipment was made in the amount of $10,000.

k. Xyz Inc. incurred and accrued marketing expenses of $37,000.

l. Cable, internet, and phone expenses for Sales Offices was $32,000 and cable, internet, and phone utilities were accrued for the administrative offices: $8,000.

m. $158,000 of goods were completed and transferred to the finished goods department.

n. Sold $500,000 (sales price) on account. The goods had a cost of $118,000.

Required - Prepare (in good form) a schedule of cost of goods manufactured and an income statement for the year ending December 31, 20X1. The income statement must show detail of cost of goods sold.