Your first internship assignment is to prepare two schedules for Indigo Blue Co., a manufacturing company. You have a file that contains a copy of last year's work for both schedules; you plan to follow the same format as last year, hoping the staff accountant had it right. You also have access to the full set of financials for Indigo Blue, and you can dig further into any of the accounts via the accounting system, too. Here's the information you have pulled, with the same items as last year.

	Beginning of Year	End of Year
DM Inventory	$ 8,500	$ 10,300
WIP Inventory	$ 20,000	$ 12,000
FG Inventory	$ 6,500	$ 8,000
DM purchases		$ 140,000
DL costs		$ 220,000
Production supervisor salary		$ 60,000
Utility costs in production space		$ 13,000
Depreciation on manufacturing facility and equipment		$ 45,000
Indirect materials		$ 8,000
Indirect labor		$ 15,000

Required

a. Prepare a complete schedule of COGM and COGS for Indigo Blue for the current year, in good form.

b. Will these schedules be published as part of the company's financial statements? Explain their purpose.

c. You did not gather information about depreciation expense on the headquarters facility, executive salaries, advertising costs, or administrative expenses. If Indigo actually incurred all of these costs, should they also have been included in the schedules created in part (a) above? Why or why not?

Follow the flow of costs through inventory accounts to determine COGS.