Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 10, Problem 23P
Problem 1-21A Effect of product versus period costs on financial statements
Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the
1. Acquired $68,000 cash by issuing common stock.
2. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year.
3. Paid salaries of $4,500 to selling and administrative employees.
4. Paid wages of $10,000 to production workers.
5. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life.
6. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life.
7. Sold inventory to customers for $35,000 that had cost $14,000 to make.
Required
Explain how these events would affect the
*Record accumulated depreciation as negative amounts in these columns.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
. Problems Problem 1 ( Flow of an accounting for the manufacturing company ) The following events took place at the Barton Manufacturing Corporation for a . the current year : 1. Purchased P80,000 in direct materials . 2. Incurred labor costs as follows : Direct labor , P42,000 . b . Supervisory labor , P11,500 ( part of manufacturing overhead ) . 3. Purchased manufacturing equipment for P67,200 . 4. Other manufacturing overhead was P80,500 , excluding supervisory labor . 5. Transferred 70 percent of the materials purchased to work in process . 6. Completed work on 60 percent of the goods in process . Costs are equally across all work in process . 7. Sold 90 percent of the completed goods . assigned There were no beginning balances in the inventory accounts . All costs incurred were debited to the appropriate account and credited to accounts payable . Required : 1. Prepare journal entries to reflect these events . 2. Prepare T - accounts to show these events . 3. Prepare a cost of…
Question 1.2
Following are the account balances for the DC Company in 2018:
Beginning of 2018
26,500
Ending of 2018
Direct materials inventory
Work-in-process inventory
Finished-goods inventory
27,000
28,400
22,100
79,000
30,500
16,500
Purchases of direct materials
Direct manufacturing labor
Indirect manufacturing labor
24,500
18,600
Plant insurance
7,900
Depreciation-plant, building, and equipment
Repairs and maintenance-plant
Marketing, distribution, and customer-service costs
11,800
3,500
87,900
General and administrative costs
26,500
Required:
1. Prepare a schedule for the cost of goods manufactured for 2018.
2. Revenues for 2018 was $425,000. Prepare the income statement for 2018.
III Froblems
Problem 1 (Flow of an accounting for the manufacturing company)
The following events took place at the Barton Manufacturing Corporation for
the current year:
1. Purchased P80,000 in direct materials.
2 Incurred labor costs as followS
a Direct labor, P42,000.
b. Supervisory labor, PI1,500 (part of manufacturing overhead).
3. Purchased manufacturing equipment for P67,200.
4. Other manufacturing overhead was P80,500, excluding supervisory
labor.
5. Transferred 70 percent of the materials purchased to work in process.
6. Completed work on 60 percent of the goods in process. Costs are assigned
equally across all work in process.
7. Sold 90 percent of the completed goods.
There were no beginning balances in the inventory accounts. All costs
incurred were debited to the appropriate account and credited to accounts
payable.
Required:
1. Prepare jourmal entries to reflect these events.
2. Prepare T-accounts to show these events.
3. Prepare a cost of goods sold statement from the…
Chapter 10 Solutions
Survey Of Accounting
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Question Content Area Income Statement An analysis of the transactions of Rutherford Company for the year ended December 31, yields the following information: sales revenue, $149, 700; insurance expense, S4, 300; interest income, 58, 500; cost of goods sold, $64, 800; salaries expense, $22, 500; income taxes expense, $2, 400; and loss on disposal of property, plant, and equipment, $1, 200. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below. Open spreadsheet Required: Prepare a single - step income statement. Rutherford Company Income Statement For the year ending December 31 Revenues and gains: Sfill in the blank 3 fill in the blank 5 Total revenues Sfill in the blank 6 Expenses and losses: Sfill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 fill in the blank 16 Total expenses and losses fill in the blank 17 Sfill in the blank 19arrow_forwardQuestion 2 The Anthony Company, a sole proprietorship, reports the following information pertaining to its operating activities: During the year, the company purchased $40,000 of direct materials and incurred $21,000 of direct labor costs. Total manufacturing overhead costs for the year amounted to $18,000. Selling and administrative expenses amounted to $60,000, and the company’s annual sales amounted to $250,000. Prepare Anthony’s schedule of the cost of finished goods manufactured. Prepare Anthony’s income statement (ignore income taxes).arrow_forwardView Policies Current Attempt in Progress The following data has been taken from the accounting records of Curtis Manufacturing Company for the current year: Sales Purchases of direct materials Direct labor cost during period Manufacturing overhead applied during period Direct Materials Inventory, beginning Direct Materials Inventory, ending Work in Process Inventory, beginning Work in Process Inventory, ending Finished Goods Inventory, beginning Finished Goods Inventory, ending (a) Direct materials used in production eTextbook and Media $600,000 Save for Later 350,000 120,000 60,000 20,000 25,000 47,000 32,000 Compute the cost of direct materials moved into production during the period. 75,000 82,000 Attempts: 0 of 4 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when you complete the part above.arrow_forward
- QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement. Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the company’s production, sales and cost records for the year ended December 31, 2021. Sales $ 450,000 Indirect Labour 12,000 Utilities 15,000 Direct Labour 70,000 Depreciation, factory equipment 21,000 Raw materials purchased 165,000 Depreciation, sales equipment 18,000 Insurance expired during the year 4,000 Rent on facilities 50,000 Selling and administrative salaries 32,000 Advertising 75,000 Additional information about the company follows: Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities Only 80 percent of the rent on facilities apply to factory operations: the remainder…arrow_forwardQUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement. Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the company’s production, sales and cost records for the year ended December 31, 2021. Sales $ 450,000 Indirect Labour 12,000 Utilities 15,000 Direct Labour 70,000 Depreciation, factory equipment 21,000 Raw materials purchased 165,000 Depreciation, sales equipment 18,000 Insurance expired during the year 4,000 Rent on facilities 50,000 Selling and administrative salaries 32,000 Advertising 75,000 Additional information about the company follows: Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to…arrow_forwardActivity 2 Alexandria Company provided the following data for the current year: Inventory end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows: Finished goods 200,000 decrease Goods in process 90,000 decrease Raw materials 100,000 increase Indirect labor 600,000 Factory taxes 130,000 Sales 8,000,000 Purchase 1,600,000 Office salaries 800,000 Freight in 80,000 Income tax expense 170,000 Depreciation-machinery 50,000 Advertising 120,000 Office supplies expense 30,000 Factory Superintendence 480,000 Direct labor 1,480,000 Factory heat, light and power 220,000 Doubtful account 100,000 Factory supplies expense 120,000 Sales salaries 520,000 Delivery expense 160,000 Factory maintenance 150,000 Required: Prepare an income statement for the current year supported…arrow_forward
- QUESTION 1: Schedule of Cost of Goods Manufactured: Income Statement. Richmond Chocolates Limited, a manufacturing Company, produces a single product. The following information has been taken from the company’s production, sales and cost records for the year ended December 31, 2021. Sales $ 450,000 Indirect Labour 12,000 Utilities 15,000 Direct Labour 70,000 Depreciation, factory equipment 21,000 Raw materials purchased 165,000 Depreciation, sales equipment 18,000 Insurance expired during the year 4,000 Rent on facilities 50,000 Selling and administrative salaries 32,000 Advertising 75,000 Additional information about the company follows: Some 60 percent of the utilities costs and 75 percent of the expired insurance apply to factory operations. The remaining amounts apply to selling and administrative activities Only 80 percent of the rent on facilities apply to factory operations: the remainder applies to…arrow_forward5 Rockeagle Corporation began fiscal Year 2 with the following balances in its inventory accounts. Raw Materials Work in Process $ 30,000 45,000 14,000 Finished Goods Return to question During the accounting period, Rockeagle purchased $125,000 of raw materials and issued $124,000 of materials to the production department. Direct labor costs for the period amounted to $162,000, and manufacturing overhead of $24,000 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $306,000 to produce were completed and transferred to Finished Goods ventory. Goods costing $301,000 were sold for $400,000 during the period. Selling and administrative expenses amounted to $36,000. Required a. Determine the ending balance of each of the three inventory accounts that would appear on the year-end balance sheet. b1. Prepare a schedule of cost of goods manufactured and sold. b2. Prepare an income statement.arrow_forwardCash Raw materials inventory Work in process inventory Finished goods inventory Common stock Retained earnings Totals The subsidiary completed the following transactions during Year 2. 1. Paid $57,120 cash for direct raw materials. 2. Transferred $47,600 of direct raw materials to work in process. 3. Paid production employees $76,160 cash. 4. Applied $50,450 of manufacturing overhead costs to work in process. 5. Completed work on products that cost $155,150. 6. Sold products that cost $136,110 for $173,240 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b. 7. Paid $19,040 cash for selling and administrative expenses. 8. Actual overhead costs paid in cash amounted to $52,350. 9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial). 10. Made a $4,750 cash distribution to the owners. Required a. For Anywhere, Inc., record the events in a financial statements model.…arrow_forward
- PROBLEM 11. Prepare the Cost Sheet to show the total cost of production and cost per unit of goods manufactured by a company for the month of July, 2006. Also find the cost of sales and profit. 2$ $ Stock of Raw Materials, 1-7-2006 Raw Materials purchased Stock of Raw Materials, 31-7-2006 Mar.ufacturing Wages Depreciation on Plant Loss on sale of a part of Plant Factory Rent and Rates 3,000 Office Rent 28,000 General Expenses 4,500 Discount on Sales 7,000 Advertisement Expenses to be charged fully 600 1,500 Income Tax Paid 300 Sales 3,000 500 400 300 2,000 50,000 The number of units produced during July, 2006 was 3,000. The stock of finished goods was 200 and 400 units on 1-7-2006 and 31-7-2006 respectively. The total cost of the units on hand on 1-7-2006 was $. 2,800. All these had been sold during the month.arrow_forwardQuestion 1 During Goodluck Company's first 2 years of operations, the company reported the following net income as follows: Year 1 Year 2 Sales @ $25 Cost of goods sold @ $18 per unit Gross profit Selling and administrative expenses per unit $1,000,000 $1.250,000 (720,000) (900,000) 280,000 350,000 (210,000) (230,000) ($2 per unit variable; $130 fixed each year) Net income 70,000 120,000 The company's $18 unit product cost is computed as follows: Direct materials $4 Direct labour $7 Variable Manufacturing overhead Fixed manufacturing overhead ($270,000 + 45,000 units $1 $6 Production and cost data for the two years are Year 1 Year 2 Units produced Units sold 45,000 40,000 45,000 50,000 Required: а) Compute the product cost. b) Prepare a variable costing contribution format income for Year 1 and Year 2arrow_forwardExercise 11-15A (Algo) Recording events in T-accounts and preparing financial statements LO 11-1, 11-2, 11-3 Thornton Manufacturing Company was started on January 1, Year 1, when it acquired $3,500 cash from the issue of common stock. During the first year of operation, $2,300 of direct raw materials was purchased with cash, and $1,350 of the materials was used to make products. Direct labor costs of $2,500 were paid in cash. Thornton applied $790 of overhead cost to the Work in Process account. Cash payments of $790 were were made for actual overhead costs. The company completed products that cost $3,100 and sold goods that had cost $2,400 for $3,500 cash. Selling and administrative expenses of $630 were paid in cash. Required Prepare T-accounts and record the events affecting Thornton Manufacturing. Include closing entries. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License