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    Preparing Financial Statements for Kelly's Boutique

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    Prepare financial statements. Please view the attachment as this is a three part question with 5 sub-questions. Please provide work in excel or word.

    Part 1:

    In 20X3, Kelly opened Kelly's Boutique. On December 31, 20X4, her accounting records show the following:

    Inventory on December 31, 20X4...................... $9,850
    Inventory on January 01, 20X4......................... 10,700
    Sales revenue............................................. 46,000
    Utilities for store.......................................... 2,450
    Rent for store.............................................. 4,000
    Sales Commissions....................................... 1,500
    Purchases of merchandise............................... 27,000

    1.) Prepare an income statement for Kelly's Boutique, a merchandiser.

    Part 2:

    Kelly's Boutique succeeded so well that Kelly decided to manufacture her own brand of make-up, called CoverUp. At the end of December 20X5, her accounting records show the following:

    Work in process inventory, December 31, 20X5...... $640
    Finished goods inventory, December 31, 20X4........ 0
    Finished goods inventory, December 31, 20X5........ 5,700
    Sales revenue................................................ 97,450
    Customer service hotline................................... 1,000
    Utilities for plant............................................ 3,400
    Delivery expense............................................ 1,500
    Sales salaries................................................ 4,500
    Plant janitorial services.................................... 1,250
    Direct labor.................................................. 17,500
    Direct material purchases................................. 30,000
    Rent on manufacturing plant.............................. 9,000
    Direct materials inventory, December 31, 20X4....... 12,000
    Direct materials inventory, December 31, 20X5....... 8,750
    Work in process inventory, December 31, 20X4...... 0

    1.) Prepare a schedule of cost of goods manufactured for CoverUP Manufacturing.
    2.) Prepare an income statement for CoverUp Manufacturing.
    3.) How does the format of the income statement for CoverUp Manufacturing differ from the income statement of Kelly's Boutique?

    Part 3:

    Show the ending inventories that would appear on these balance sheets:

    1.) Kelly's Boutique at December 31, 20X4.
    2.) CoverUp Manufacturing at December 31, 20X5.

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    https://brainmass.com/business/financial-statements/preparing-financial-statements-for-kelly-s-boutique-7142

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    Solution Summary

    The solution prepares financial statements: 1) an income statement for Kelly's Boutique, a merchandiser; 2) a schedule of cost of goods manufactured and an income statement for CoverUP Manufacturing.

    $2.49

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