1.

The following transactions relate to Mammoth Product Company for the year ended December 31,
2012:

(5)
A) cost of goods manufactured statement
Solution
Direct material:
Raw material at the beginning of period.................................................100,000
Purchase of raw material.........................................................................250,000
Raw material available for use ....................................................350,000
Less: raw material at the end of period...................................................150,000
Raw material used in production....................................................……………..200,000
Direct labor..............................................................................................……………..450,000
Manufacturing overhead:
Factory rent...................................................................................75,000
Depreciation on plant & equipment..............................................50,000
Factory light & power...................................................................25,000
Salaries & wages of factory labour...............................................100,000……250,000
Total manufacturing costs.............................................................900,000
Add : work in process inventory at beginning of period ........................300,000
1,200,000
Less : work in process inventory at end of period...................................400,000
Cost of goods manufactured..........................................................800,000

1
B. Cost of goods sold statement
Solution
Finished goods inventory at beginning of period...................................150,000
cost of goods manufactured.....................................................................800,000
Goods available for sale..........................................................................950,000
Less : Finished goods inventory at the end of period..........................250,000
Cost of goods sold...................................................................................700,000
C. Statement of comprehensive income
Solution
Sales.......................................................................................................900,000
Less : Cost of goods sold.........................................................................700,000
Gross profit..............................................................................................200,000
Less : Selling and administrative expense...............................................75,000
Operating Profit.......................................................................................125,000