Problem
Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO2-6] Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials): Selling expenses $ 218,000 Purchases of raw materials $ 269,000 Direct labor ? Administrative expenses $ 158,000 Manufacturing overhead applied to work in process $ 334,000 Total actual manufacturing overhead costs $ 350,000 Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 56,000 $ 35,000 Work in process ? $ 24,000 Finished goods $ 35,000 ? The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $37,000. The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
Required:
a. Prepare a schedule of cost of goods manufactured.
b. Prepare a schedule of cost of goods sold.
c. Prepare an income statement for the year.