Income Statement and Supporting Schedules.
The following financial information is for Caravelli Company. (Note that the most current financial information is presented in the first column.)
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December 31, 2016
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December 31, 2015
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Raw materials inventory
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$ 24,000
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$ 30,000
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Work-in-process inventory
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1,800,000
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1,650,000
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Finished goods inventory
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1,050,000
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1,230,000
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Of the total raw materials placed in production for the year, $36,000 was for indirect materials. The company had $3,795,000 in sales for the year ended December 31, 2016. The company also had the following costs for the year:
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Selling
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$ 270,000
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General and administrative
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$ 720,000
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Raw materials purchases
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$ 300,000
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Direct labor used in production
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$ 375,000
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Manufacturing overhead
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$1,890,000
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Required:
1. Prepare a schedule of raw materials placed in production for the year ended December 31, 2016.
2. Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016.
3. Prepare a schedule of cost of goods sold for the year ended December 31, 2016.
4. Prepare an income statement for the year ended December 31, 2016.
5. Describe the three types of costs included in cost of goods sold on the income statement. (Dollar amounts are not necessary in your descriptions.)