Rundle Manufacturing Company was started on January 1, Year 1, when it acquired $76,000 cash by issuing common stock. Rundle immediately purchased office furniture and manufacturing equipment costing $8,400 and $33,200, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of administrative personnel and $15, 500 for wages to production personnel. Finally, the company paid $13,390 for raw materials that were used to make inventory. All inventory was started and completed during the year. Rundle completed production on 4,700 units of product and sold 3,750 units at a price of $15 each in Year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP) Required Determine the total product cost and the average cost per unit of the inventory produced in Year 1. (Round "Average cost per unit" to 2 decimal places.) Determine the amount of cost of goods sold that would appear on the Year 1 income statement. (Do not round intermediate calculations.) Determine the amount of the ending inventory balance that would appear on the December 31, Year 1, balance sheet. (Do not round intermediate calculations.) Determine the amount of net income that would appear on the Year 1 income statement. (Round your answer to the nearest dollar amount.) Determine the amount of retained earnings that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.) Determine the amount of total assets that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.) PLEASE
Rundle Manufacturing Company was started on January 1, Year 1, when it acquired $76,000 cash by issuing common stock. Rundle immediately purchased office furniture and manufacturing equipment costing $8,400 and $33,200, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of administrative personnel and $15, 500 for wages to production personnel. Finally, the company paid $13,390 for raw materials that were used to make inventory. All inventory was started and completed during the year. Rundle completed production on 4,700 units of product and sold 3,750 units at a price of $15 each in Year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP) Required Determine the total product cost and the average cost per unit of the inventory produced in Year 1. (Round "Average cost per unit" to 2 decimal places.) Determine the amount of cost of goods sold that would appear on the Year 1 income statement. (Do not round intermediate calculations.) Determine the amount of the ending inventory balance that would appear on the December 31, Year 1, balance sheet. (Do not round intermediate calculations.) Determine the amount of net income that would appear on the Year 1 income statement. (Round your answer to the nearest dollar amount.) Determine the amount of retained earnings that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.) Determine the amount of total assets that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.) PLEASE
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Rundle Manufacturing Company was started on January 1, Year 1, when it acquired $76,000 cash by issuing common
stock. Rundle immediately purchased office furniture and manufacturing equipment costing $8,400 and $33,200,
respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment
had a $4,000 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of
administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $13,390 for raw
materials that were used to make inventory. All inventory was started and completed during the year. Rundle completed
production on 4,700 units of product and sold 3,750 units at a price of $15 each in Year 1. (Assume that all transactions
are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total
product cost and the average cost per unit of the inventory produced in Year 1. (Round "Average cost per unit" to 2
decimal places.) Determine the amount of cost of goods sold that would appear on the Year 1 income statement. (Do
not round intermediate calculations.) Determine the amount of the ending inventory balance that would appear on the
December 31, Year 1, balance sheet. (Do not round intermediate calculations.) Determine the amount of net income
that would appear on the Year 1 income statement. (Round your answer to the nearest dollar amount.) Determine the
amount of retained earnings that would appear on the December 31, Year 1, balance sheet. (Round your answer to the
nearest dollar amount.) Determine the amount of total assets that would appear on the December 31, Year 1, balance
sheet. (Round your answer to the nearest dollar amount.) PLEASE
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