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Tombert Company is a manufacturer of computers Its controller resigned in October 2012. An inexperienced assistant accountant has prepared the following income statement for the month of October

Tombert Company is a manufacturer of computers. Its controller resigned in October 2012. An inexperienced assistant accountant has prepared the following income statement for the month of October 2012. Prior to October 2012, the company had been profitable every month. The company s president is concerned about the accuracy of the income statement. As his friend, he has asked you to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired the following additional information. 1. Inventory balances at the beginning and end of October were as follows: ........................October 1........... October 31 Raw materials ..........$18,000.............. $34,000 Work in process .........16,000............... 14,000 Finished goods ...........30,000............... 48,000 2. Only 70% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Instructions Calculate the following: (a) Prepare a schedule of the cost of goods manufactured for October 2012. (b) Prepare a correct income statement for October 2012.

Jun 25 2020 View more View Less

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