The Following Data (In Thousands of Dollars)have Been Taken from the Accounting

question 58

Essay

The following data (in thousands of dollars)have been taken from the accounting records of Larner Corporation for the year just completed:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 870 \\\hline \text { Purchases of raw materials* } & \$ 110 \\\hline \text { Direct labour } & \$ 130 \\\hline \text { Manufacturing overhead } & \$ 200 \\\hline \text { Administrative expenses } & \$ 160 \\\hline \text { Selling expenses } & \$ 140 \\\hline \text { Raw materials inventory, beginning* } & \$ 30 \\\hline \text { Raw materials inventory, ending* } & \$ 60 \\\hline \text { Work in process inventory, beginning } & \$ 50 \\\hline \text { Work in process inventory, ending } & \$ 10 \\\hline \text { Finished goods inventory, beginning } & \$ 150 \\\hline \text { Finished goods inventory, ending } & \$ 140 \\\hline\end{array}$
Required:
(a.)Prepare a schedule of cost of goods manufactured in good form.
(b.)Compute the cost of goods sold.
(c.)Using data from your answers above as needed,prepare an income statement in good form.

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Definitions:

Taxable Income

Income subject to tax, computed by deducting allowable deductions from gross income.

Book Income

The income reported by a business according to accounting principles, before taxation.

Permanent Difference

A discrepancy between the book income and taxable income that is not temporary and will not reverse in the future, affecting the company's tax and financial reporting differently.

Book Income

The income reported by a company in its financial statements according to the applicable accounting rules, which may differ from taxable income.