Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement

Valenko Company provided the following account balances for the year ended December 31   (all

raw materials are used in production as direct materials):

 

Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$215,000
Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$260,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	?
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$160,000
Manufacturing overhead applied to work in process . . . . . . . . .	$340,000
Total actual manufacturing overhead costs . . . . . . . . . . . . . . .	$350,000

 

Inventory balances at the beginning and end of the year were as follows:

 

Â	Beginning of Year	End of Year
Raw materials . . . . . . . . . . . . . . . . . .	$50,000	$40,000
Work in process . . . . . . . . . . . . . . . . Finished goods . . . . . . . . . . . . . . . . .	? $30,000	$33,000 ?

 

The total manufacturing costs for the year were $675,000; the cost of goods available for sale totaled $720,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $35,000. The company’s overapplied or underapplied overhead is closed entirely to cost of goods sold.

Required:

Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the sched- ule of cost of goods manufactured.)