a.
Introduction: Cost of goods manufactured refers to the overall
To prepare: A schedule of cost of goods manufactured for the month ended October 31, 2020.
b.
Introduction: An income statement is prepared by the business organizations to know how much amount of gross profit or net profit they earn during the year. An income statement's objective is to display a company's financial success over a specific time frame.
To prepare: An income statement for the month ended October 2020.
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EBK ACCOUNTING PRINCIPLES
- James Madison was brought in as assistant to Computron’s chairman, who had the task of getting the company back into a sound financial position. Madison must prepare an analysis of where the company is now, what it must do to regain its financial health, and what actions to take. Your assignment is to help her answer the following questions, using the recent and projected financial information shown next. Provide clear explanations, not yes or no answers. Calculate the inventory turnover, days sales outstanding (DSO), fixed assets turnover, operating capital requirement, and total assets turnover. How does Computron's utilization of assets stack up against other firms in its industry?arrow_forwardOn March 3, 2016, Zad Company was established to produce and sell plastic products. The company produces a full line of plastic products included customized orders. The Chief Executive Officer of the company is working hard to enhance profitability and liquidity. Recently, you have been hired as the Financial Director of the company. 1. On March 8, 2020, the Chief Financial Officer stated to you that she wishes to reduce the company's investment in current assets since those assets provide little, if any, return to the firm. How would you respond to this statement? 2. On September 17, 2020, the Chief Financial Officer stated to you that as long as the company maintains a positive cash balance, why is it essential to review the firm's cash flows? 3. On January 5, 2021, the Chief Financial Officer wishes to expand the company's operations and are trying to determine the amount of debt financing the company should obtain versus the amount of equity financing that should be raised. The…arrow_forward16. An inexperienced clerk prepared an income statement for the month of June. Carlos Villa was disappointed with the result of operation. You discovered that a bill for advertising leaflets ordered from Rajah Printing in the amount of P5,000 was not included. Salaries for the last week of June was still unpaid and unreported. You are to prepare a correct income statement. Should the owner be glad with the revised report you gave? VILLA'S MACHINE WORKS June 30, 2018 5:00 P.M. Revenues: Machine work income Investment by Carlos Villa, owner Loan from bank (including P1,000 interest expense) Expenses: Payment to long term creditors Cash withdrawn by Villa Expenses required for services provided to customers (1/4 for utilities, the balance shared equally by rent and salaries) Purchase of land Net Loss Required: Prepare a correct income statement. P 40,000 20,000 60,000 P 32,000 5,000 P120,000 30,000 64,000 131.000 P 11.000arrow_forward
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- XYZ Bakery's general manager was puzzled by the results of the income statement for the month which showed a net loss for the bakery. The owner is puzzled because of the volume of customers who flood the bakery each day for baked goods. The owner calculated the cost of direct materials and direct labor and was sure the prices were set right and overhead was estimated based on prior year expenses. How is it possible that volumes could be high but the store could lose money? What are other factors the owner should consider to make sure next year's financial statements report net income?arrow_forwardMargaret is the manager of a medium-size company. A few years ago, Margaret persuaded the owner to base a part of her compensation on the net income of the company. Each December she estimates year-end financial figures in anticipation of the bonus she will receive. If the bonus is not as high as she would like, she offers several recommendations to the accountant for year-end adjustments. One of her favorite recommendations is for the controller to reduce the estimate of doubtful accounts. What effect does lowering the estimate for doubtful accounts have on the income statement and balance sheet?arrow_forwardWhat Would You Do? You are responsible for preparing all of the journal entries for Regional Financial Services. You have correctly prepared the following entry for financial services provided on December 15: Your boss has asked you to change the date from December 15 to January 15 so that the business’s profit, and thus taxes, would be lower. Are you allowed to do this? What is your response to your boss? How should you handle this situation?arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub