Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year Sales Revenue $14,275,000 Direct Factory Labour $3,952,600 Indirect Factory Labour $1,232,250 Total depreciation 1 400,000 Total Utilities 525,000 Distribution and customer service costs 76,800 Insurance on plant and equipment 585,000 Property taxes 3 90,000 Administrative Wages and Salaries 1,076,000 Advertising Expenses 57,700 Sales commission 6% of sales Revenue Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs. 2 Of the total utilities, 75% relates to the production and 25% relates to general and administrative costs. The property taxes should be shared: 85% production & 15% general & administrative costs The following additional information is also available: Inventory Date: 1/1/2020 Purchases 31/12/2020 Raw Materials $750,000 $4,330,000 $807,000 Indirect Materials 55,000 320,000 71,500 Work in Progress 1,115,400 n/a 924,000 Finished Goods 1,142,600 n/a 1,720,200 How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising entity?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Pro-Leather Company is a manufacturer of leather cases for tablets. The following information pertains to operations during the 2020 calendar year

Sales Revenue	$14,275,000
Direct Factory Labour	$3,952,600
Indirect Factory Labour	$1,232,250
Total depreciation 1	400,000
Total Utilities	525,000
Distribution and customer service costs	76,800
Insurance on plant and equipment	585,000
Property taxes 3	90,000
Administrative Wages and Salaries	1,076,000
Advertising Expenses	57,700
Sales commission	6% of sales Revenue

Of the total depreciation, 80% relates to factory plant & equipment and 20% relates to general and administrative costs.
2 Of the total utilities, 75% relates to the production and 25% relates to general and administrative costs.
The property taxes should be shared: 85% production & 15% general & administrative costs

The following additional information is also available:

Inventory Date:	1/1/2020	Purchases	31/12/2020
Raw Materials	$750,000	$4,330,000	$807,000
Indirect Materials	55,000	320,000	71,500
Work in Progress	1,115,400	n/a	924,000
Finished Goods	1,142,600	n/a	1,720,200

How does the format of the income statement for a manufacturing concern differ from the income
statement of a merchandising entity?

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