Valenko Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
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| Selling expenses |
$ |
216,000 |
| Purchases of raw materials |
$ |
268,000 |
| Direct labor |
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? |
| Administrative expenses |
$ |
152,000 |
| Manufacturing overhead applied to work in process |
$ |
337,000 |
| Total actual manufacturing overhead costs |
$ |
357,000 |
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| Inventory balances at the beginning and end of the year were as follows: |
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Beginning of Year |
End of Year |
| Raw materials |
$ |
58,000 |
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$ |
39,000 |
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| Work in process |
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? |
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$ |
31,000 |
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| Finished goods |
$ |
36,000 |
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? |
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The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $39,000. The company's overapplied or underapplied overhead is closed entirely to cost of goods sold.
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| a. |
Prepare a schedule of cost of goods manufactured. (Input all amounts as positive values. Omit the "$" sign in your response.) |
Valenko Company
Schedule of Cost of Goods Manufactured |
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Debit Credit
Direct materials -
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| Raw materials inventory |
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| Add : Purchases of raw materials |
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| Total raw materials available - |
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| Deduct : Raw materials inventory, ending |
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| Raw materials used in production - |
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| Direct labor |
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| Manufacturing overhead applied to work in process inventory |
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| Total manufacturing cost - |
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| Add : Beginning work in process inventory |
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| Deduct: Ending work in process inventory |
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| Cost of goods manufactured |
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| b. |
Prepare a schedule of cost of goods sold. (Input all amounts as positive values. Omit the "$" sign in your response.)
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Valenko Company
Schedule of Cost of Goods Sold
Credit
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| Finished goods inventory, beginning |
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| Add : Cost of goods manufactured |
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| Cost of goods available for sale |
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| Deduct : Finished goods inventory, ending |
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| Unadjusted cost of goods sold |
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| Add : Underapplied overhead |
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| Adjusted cost of goods sold |
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| c. |
Prepare an income statement for the year. (Input all amounts as positive values. Omit the "$" sign in your response.)
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Valenko Company
Income Statement
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Debit Credit
Sales
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| Cost of goods sold |
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Gross margin
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| Selling and administrative expenses - |
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| Selling expenses |
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| Administrative expense |
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Net operating income
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