ALABAMA CORPORATION Goals and Objectives Review of basic terminology Review basic accounting and journal entries to reflect the flow of costs Review preparation of income statement and supporting schedules for manufacturer

given end-of-year information The company manufactures a single product, cleverly named Product X. The following information is available for the calendar year 2018 just completed, during which they produced and sold 200,000 units. Sales for the year was $2,400,000. During the year, the company paid a sales commission of 5 percent of sales. The corporate income tax rate was 20%. Direct materials purchases Direct labor Depreciation - factory equipment Depreciation - factory building Depreciation - headquarters building Factory insurance Property taxes: Factory Headquarters Utilities - factory Utilities - sales Administrative salaries Indirect labor salaries Sales office salaries Inventory Information Raw materials Work in process Finished Goods $300,000 140,000 45,000 30,000 50,000 15,000 20,000 18,000 34,000 1,800 150,000 156,000 90,000 12/31/2017 12/31/2018 $124,000 $152,000 124,000 130,000 109,000 118,904/nREQUIRED: 1. Post all of the above a summary entries in T accounts. 2. Compute the direct materials used in production. 3. Compute the prime cost. 4. Compute the conversion cost. 5. Prepare the Schedule of Direct Materials Used 6. Prepare the Schedule of Cost of Goods Manufactured 7. Prepare the Schedule of Cost of Goods Sold 8. Prepare an income statement for 2018, acceptable for GAAP in good form. 9. How many finished units of Product X do you thing were in the ending FG inventory?

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