Latourneau Company had the following account balances as of August 1, 2010: Raw Material (direct and indirect)
Question:
Latourneau Company had the following account balances as of August 1, 2010:
Raw Material (direct and indirect) Inventory $25,300
Work in Process Inventory 10,000
Finished Goods Inventory 20,000
During August, the company incurred the following factory costs:
1. Purchased $174,000 of raw material on account.
2. Issued $190,000 of raw material to production, of which $134,000 was for direct materials.
3. Accrued $98,000 in factory payroll costs; $62,000 was for direct labor and the rest was
for supervisors’ salaries.
4. Accrued $8,000 of utility costs; of this amount, $1,600 was fixed.
5. Accrued $5,000 of property taxes on the factory.
6. Recorded the expiration of $2,600 of prepaid insurance on factory equipment.
7. Recorded $50,000 of straight-line depreciation on factory equipment.
8. Applied actual overhead to Work in Process Inventory.
9. Transferred goods costing $330,000 to Finished Goods Inventory.
10. Recorded total sales of $750,000; of these, $550,000 were on account.
11. Recorded cost of goods sold of $330,000.
12. Recorded selling and administrative costs of $350,000 (credit “Various accounts”).
Required:
d. Prepare an income statement, including a detailed schedule of cost of goods sold.
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello