The following data were taken from the records of Blue Company for the fiscal year ended June 30, 2017.

Raw Material Inventory 7/1/16 $49,900

Factory Insurance $4,800

Raw Material Inventory 6/30/17 45,000

Factory Machinery Depreciation 17,100

Finished Goods Inventory 7/1/16 96,100

Factory Utilities 30,500

Finished Goods Inventory 6/30/17 28,500

Office Utilities Expense 9,550

Work in Process Inventory 7/1/16 22,700

Sales Revenue 556,800

Work in Process Inventory 6/30/17 29,200

Sales Discounts 4,500

Prepare Income statement through gross profit.

Base on the scenario been described in the question, we are can use the following.

Sales Revenue 556,800

Less Cost of Sales

Opening Stock of Finished Goods 96,100

Add Cost of Goods Manufactured:

Raw Materials ($49,900-45,000) 4,900

Factory Insurance 4,800

Factory Machinery Depreciation 17,100

Factory Utilities 30,500

Add Opening Work in Process Inventory 22,700

Less Closing Work in Process Inventory (29,200)

Less Closing Stock Finished Goods Inventory (28,500) (118,400)

Gross Profit 438,400

Office Utilities Expense (9,550)

Discounts sales (4,500)

Net Income 424,350

Sales Revenue 556,800

Less Cost of Sales

Opening Stock of Finished Goods 96,100

Add Cost of Goods Manufactured:

Raw Materials ($49,900-45,000) 4,900

Factory Insurance 4,800

Factory Machinery Depreciation 17,100

Factory Utilities 30,500

Add Opening Work in Process Inventory 22,700

Less Closing Work in Process Inventory (29,200)

Less Closing Stock Finished Goods Inventory (28,500) (118,400)

Gross Profit 438,400

Less Expenses:

Office Utilities Expense (9,550)

Sales Discounts (4,500)

Net Income / (loss) 424,350

Explanation:

Note that Cost Of Goods sold Consist of Accumulation of Manufacturing Costs.