Question

Solomon Manufacturing Company was started on January 1, 2018, when it acquired $86,000 cash by issuing common stock. Solomon immediately purchased office furniture and manufacturing equipment costing $8,400 and $35,700, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,700 salvage value and an expected useful life of four years. The company paid $11,200 for salaries of administrative personnel and $15,900 for wages to production personnel. Finally, the company paid $10,500 for raw materials that were used to make inventory. All inventory was started and completed during the year. Solomon completed production on 4,300 units of product and sold 3,350 units at a price of $15 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Required

1. Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per unit" to 2 decimal places.)

2. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.)

3. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.)

4. Determine the amount of net income that would appear on the 2018 income statement. (Round your answer to the nearest dollar amount.)

5. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

6. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.)

Answer 1

Answer 4. Oetevmingtion of Totql Aoduct cost and the qverage coit por uniE Particu lars Rqw Materiq ) wages Depreciation on manyfacturing Equlement (35700 - 3700 Amt.($) 10500 15900 8000 4 years) Toty) Aoduct costcit2 +3) 5. unis Aoduced 34400 14 4300 C. Average Cost per unit (4÷5) 6. Oetermingtjon of Amount of Cost of Goos fold Cast of Gouli SoN = Average (ost per unit x units Sold $ 8 x 335o units $ 26800 Amoynt of Enving Inventory C. Oetevmiaqtion of Avevage Cost per ynib x tnding zventory з 350) 4аjts] Enting Iventeng $ 8 X [C4800 - $ 8 x 950 unis $ 7600 %3D d. Oetevmingtion of amoynt of Net Income Income stytement Sales (3350 units @ 15) -: Cost of Goods Sold Grass Margin 50250 (26800) 23450 (1l1200) (1050) Salaries and Alministrative Expenses -: Depreciqtion ( 8400 ÷ 8 yews) Net Income 1200 e Deteumingtion of Retained Equinings Opening Redanel Earnings balance as on Jan 1,2018 +: Net Income 1/200 Retainel bgrning as on Dec.31, 2018 11100

f. Oeteumingtjon_ of Total Assets 86000 1. Cash Offire fuinibre (8400) -' Manyfyckuring Epuipment (35700) (11200) (15900) (1o50) -: Sqlqvies a; Wages -; Rqw Mgtevial t: Cash sales 50250 54550 2. Inventory 3. Office finDibure -: 0ερwcigήoη 7600 8400 (1050) 7350 6. Manyfactaring Egyipmegt | 35700 (8o00) 8000) : Depvecistion 27700 To tal Assets 97200

. The qwers qre 9. 1. Totg) Protuct Cost -→ $34400 2. Average Cost por unit → $8 p.y. 6. Cast of Gos Sold c. Enting Irventony Net Fncome Rebginel Earnings f $26800 $ 7600 $ I1200 d. $ 11200 e. $ 97200 Total Assets