Question

Baird Manufacturing Company was started on January 1, 2018, when it acquired $81,000 cash by issuing common stock. Baird immediately purchased office furniture and manufacturing equipment costing $8,400 and $27,200, respectively. The office furniture had an 8-year useful life and a zero salvage value. The manufacturing equipment had a $3,800 salvage value and an expected useful life of three years. The company paid $11,200 for salaries of administrative personnel and $15,700 for wages to production personnel. Finally, the company paid $12,380 for raw materials that were used to make inventory. All inventory was started and completed during the year. Baird completed production on 4,600 units of product and sold 3,640 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 a. 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.) b. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.) c. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.) d. Determine the amount of net income that would appear on the 2018 income statement. e. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. f. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. a. Total product cost $ 35,880 7.80 $ 28,392 $7,488 $ 13,958 $ 13,958 Average cost pen b. Cost of good sold c. Ending inventory d. Net income e. Retained earning f. Total asset

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
a. Total Product Cost
Material Cost		$ 12,380
Wages		$ 15,700
Overheads
-Manufacturing Equipment Depreciation	(27200-3800)/3	$    7,800
Total Product Cost		$ 35,880
Average Cost per Unit	35880/4600 Production	$      7.80
b. Cost of Goods Sold
Cost of Goods Sold	3640 Sale Units*$7.80	$ 28,392
c. Ending Inventory
Ending Inventory	(4600-3640)*7.80	$    7,488
d. Net Income
Sales	3640*15	$ 54,600
Less: Cost of Goods Sold		$ 28,392
Gross Margin		$ 26,208
Less: Administrative Expense
Salaries		$ 11,200
Depreciation	8400/8	$    1,050
Net Income		$ 13,958
e. Retained Earning		$ 13,958
f. Total Assets
Cash	81000-8400-27200-11200-15700-12380+54600	$ 60,720
Inventory		$    7,488
Office Furniture	$                                              8,400
Less: Accumulated Depreciation	$                                            -1,050	$    7,350
Manufacturing Equipment	$                                           27,200
Less: Accumulated Depreciation	$                                            -7,800	$ 19,400
Total Assets		$ 94,958