| Requirement 1 | ||
| Mason Company | ||
| Schedule of Cost of Goods Manufactured | ||
| Particular | Amount in $ | Amount in $ |
| Direct materials: | ||
| Beginning raw materials inventory | 7000 | |
| Add; Purchases of raw materials | 118000 | |
| Raw materials available for use | 125000 | |
| Deduct : Ending raw materials inventory | 15000 | |
| Raw materials used in production | 110000 | |
| Direct labor | 70000 | |
| Manufacturing overhead | 80000 | |
| Total manufacturing costs | 260000 | |
| Add : Beginning work in process inventory | 10000 | |
| 270000 | ||
| Deduct : Ending work in process inventory | 5000 | |
| Cost of goods manufactured | 265000 | |
| Requirement 2: | |
| Prepare the cost of goods sold section of Mason Company’s income statement for the year. |
|
| Particular | Amount in $ |
| Beginning finished goods inventory | 20000 |
| Add: Cost of goods manufactured | 265000 |
| Goods available for sale | 285000 |
| Deduct: Ending finished goods inventory | 35000 |
| Cost of goods sold | 250000 |
| Requirement 3: | |
| Income statement | |
| Particular | Amount in $ |
| Sales | 524000 |
| Less: | |
| Cost of Goods sold | 250000 |
| Gross margin | 274000 |
| Less: | |
| Selling Expenses | 140000 |
| Administrative Expenses | 63000 |
| Net Income | 71000 |
