FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Morrison Company
Balance Sheet
January 1
Assets
Cash
$ 40,950
Raw materials
Work in process
Finished goods
Prepaid expenses
Property, plant, and equipment (net)
$ 17,800
6,600
31,800
56, 200
3,350
124,000
$ 224,500
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Retained earnings
$ 7,100
217,400
Total liabilities and stockholders' equity
$ 224,500
During January the company completed the following transactions:
a. Purchased raw materials on account, $75,200.
b. Raw materials used in production, $91,500 ($80,200 was direct materials and $11,300 was indirect materials).
c. Paid $202.100 of salaries and wages in cash ($108,800 was direct labor, $41,700 was indirect labor, and $51,600 was related to
employees responsible for selling and administration).
d. Various manufacturing overhead costs incurred (on account) to support production, $43,350.
e. Depreciation recorded on property, plant, and equipment, $63,600 (70% related to manufacturing equipment and 30% related to
assets that support selling and administration).
f. Various selling expenses paid in cash, $41,600.
g. Prepaid insurance expired during the month, $2,100 (80% related to production, and 20% related to selling and administration).
h. Manufacturing overhead applied to production, $138,600.
i. Cost of goods manufactured, $309,200.
j. Cash sales to customers, $422,160.
k. Cost of goods sold (unadjusted), $304,400.
I. Cash payments to creditors, $64,200.
m. Underapplied or overapplied overhead_$?
Required:
1. Calculate the ending balances that would be reported on the company's balance sheet on January 31St. (Hint: Be sure to calculate
the underapplied or overapplied overhead and then account for its affect on the balance sheet.)
2. What is Morrison Company's net operating income for the month of January?
Transcribed Image Text:k. Cost of goods sold (unadjusted), $304,400.
I. Cash payments to creditors, $64,200.
m. Underapplied or overapplied overhead _$?_
Required:
1. Calculate the ending balances that would be reported on the company's balance sheet on January 31st (Hint: Be sure to calculate
the underapplied or overapplied overhead and then account for its affect on the balance sheet.)
2. What is Morrison Company's net operating income for the month of January?
Complete this question by entering your answers in the tabs below.
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What is Morrison Company's net operating income for the month of January?
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Expert Solution
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Step 140
| Net Income | 1110 |
| Ending Balance, 31 Dec | 155210 | 1500 | 25000 | 36600 | 0 | 1250 | 60400 | = | 61450 | 218510 |
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