Tombert Company is a manufacturer of computers. Its controller resigned in October 2022. An inexperienced assistant accountant
Question:
Tombert Company is a manufacturer of computers. Its controller resigned in October 2022. An inexperienced assistant accountant has prepared the following income statement for the month of October 2022.
Prior to October 2022, the company had been profitable every month. The company’s president is concerned about the accuracy of the income statement. As his friend, he has asked you to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired the following additional information.
1. Inventory balances at the beginning and end of October were as follows:
2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.
Instructions
a. Prepare a schedule of the cost of goods manufactured for October 2022.
b. Prepare a correct income statement for October 2022.
Step by Step Answer:
Managerial Accounting Tools For Business Decision Making
ISBN: 9781119731825
6th Canadian Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Ibrahim M. Aly, Donald E. Kieso