Income Statement and Supporting Schedules. The following financial information is for Caravelli Company. (Note that the most current financial information is presented in the first column.)
| December 31, 2016 | December 31, 2015 | |
| Raw materials inventory | $ 24,000 | $ 30,000 |
| Work-in-process inventory | 1,800,000 | 1,650,000 |
| Finished goods inventory | 1,050,000 | 1,230,000 |
Of the total raw materials placed in production for the year, $36,000 was for indirect materials. The company had $3,795,000 in sales for the year ended December 31, 2016. The company also had the following costs for the year:
| Selling | $ 270,000 |
| General and administrative | $ 720,000 |
| Raw materials purchases | $ 300,000 |
| Direct labor used in production | $ 375,000 |
| Manufacturing overhead | $1,890,000 |
Required:
- Prepare a schedule of raw materials placed in production for the year ended December 31, 2016.
- Prepare a schedule of cost of goods manufactured for the year ended December 31, 2016.
- Prepare a schedule of cost of goods sold for the year ended December 31, 2016.
- Prepare an income statement for the year ended December 31, 2016.
- Describe the three types of costs included in cost of goods sold on the income statement. (Dollar amounts are not necessary in your descriptions.)
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