The following information is available for Aikman Company.

January 1, 2014

2014

December 31, 2014

Raw materials inventory

$21,000

$30,000

Work in process inventory

13,500

17,200

Finished goods inventory

27,000

21,000

Materials purchased

$150,000

Direct labor

220,000

Manufacturing overhead

180,000

Sales revenue

910,000

Instructions

(a)Compute cost of goods manufactured.

(b)Prepare an income statement through gross profit.

(c)Show the presentation of the ending inventories on the December 31, 2014, balance sheet.

(d)How would the income statement and balance sheet of a merchandising company be different from Aikman”s financial statements?