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Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Debit Credit Cash $ 77,000 Accounts receivable 46,000 Raw materials inventory 28,000 Work in process inventory 0 Finished goods inventory 12,000 Prepaid rent 4,000 Accounts payable $ 8,600 Notes payable 11,600 Common stock 40,000 Retained earnings (prior year) 79,000 Sales 203,800 Cost of goods sold 113,000 Factory overhead 25,000 General and administrative expenses 38,000 Totals $ 343,000 $ 343,000 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: $ 4,200 direct materials to Job 402 Materials requisition 11: $7,900 direct materials to Job 404 Materials requisition 12: $ 2,400 indirect materials Labor time ticket 52: $7,000 direct labor to Job 402 Labor time ticket 53: $13,000 direct labor to Job 404 Labor time ticket 54: $5,000 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $129,400 at the end of the current year. Assume that the $2,400 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets?Prepare an income statement. BERGO BAY COMPANY Income Statement For Year Ended December 31

Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Debit Credit Cash $ 77,000 Accounts receivable 46,000 Raw materials inventory 28,000 Work in process inventory 0 Finished goods inventory 12,000 Prepaid rent 4,000 Accounts payable $ 8,600 Notes payable 11,600 Common stock 40,000 Retained earnings (prior year) 79,000 Sales 203,800 Cost of goods sold 113,000 Factory overhead 25,000 General and administrative expenses 38,000 Totals $ 343,000 $ 343,000 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: $ 4,200 direct materials to Job 402 Materials requisition 11: $7,900 direct materials to Job 404 Materials requisition 12: $ 2,400 indirect materials Labor time ticket 52: $7,000 direct labor to Job 402 Labor time ticket 53: $13,000 direct labor to Job 404 Labor time ticket 54: $5,000 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $129,400 at the end of the current year. Assume that the $2,400 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets?Prepare an income statement. BERGO BAY COMPANY Income Statement For Year Ended December 31

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 29Q: If the factory overhead control account has a credit balance of 2,000 at the end of the first month...
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Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Debit Credit Cash $ 77,000 Accounts receivable 46,000 Raw materials inventory 28,000 Work in process inventory 0 Finished goods inventory 12,000 Prepaid rent 4,000 Accounts payable $ 8,600 Notes payable 11,600 Common stock 40,000 Retained earnings (prior year) 79,000 Sales 203,800 Cost of goods sold 113,000 Factory overhead 25,000 General and administrative expenses 38,000 Totals $ 343,000 $ 343,000 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: $ 4,200 direct materials to Job 402 Materials requisition 11: $ 7,900 direct materials to Job 404 Materials requisition 12: $ 2,400 indirect materials Labor time ticket 52: $7,000 direct labor to Job 402 Labor time ticket 53: $13,000 direct labor to Job 404 Labor time ticket 54: $ 5,000 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $129,400 at the end of the current year. Assume that the $2,400 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets?Prepare an income statement. BERGO BAY COMPANY Income Statement For Year Ended December 31
Transcribed Image Text:Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Debit Credit Cash $ 77,000 Accounts receivable 46,000 Raw materials inventory 28,000 Work in process inventory 0 Finished goods inventory 12,000 Prepaid rent 4,000 Accounts payable $ 8,600 Notes payable 11,600 Common stock 40,000 Retained earnings (prior year) 79,000 Sales 203,800 Cost of goods sold 113,000 Factory overhead 25,000 General and administrative expenses 38,000 Totals $ 343,000 $ 343,000 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: $ 4,200 direct materials to Job 402 Materials requisition 11: $ 7,900 direct materials to Job 404 Materials requisition 12: $ 2,400 indirect materials Labor time ticket 52: $7,000 direct labor to Job 402 Labor time ticket 53: $13,000 direct labor to Job 404 Labor time ticket 54: $ 5,000 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $129,400 at the end of the current year. Assume that the $2,400 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets?Prepare an income statement. BERGO BAY COMPANY Income Statement For Year Ended December 31
Req 4 Income Req 4 Balance Statement Sheet Prepare an income statement. Req 5 BERGO BAY COMPANY Income Statement For Year Ended December 31
Transcribed Image Text:Req 4 Income Req 4 Balance Statement Sheet Prepare an income statement. Req 5 BERGO BAY COMPANY Income Statement For Year Ended December 31
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