Question

Jordan Manufacturing Company was started on January 1, 2018, when it acquired $83,000 cash by issuing common stock. Jordan immediately purchased office furniture and manufacturing equipment costing $8,400 and $26,800, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,400 salvage value and an expected useful life of three years. The company paid $11,500 for salaries of administrative personnel and $15,200 for wages to production personnel. Finally, the company paid $10,600 for raw materials that were used to make inventory. All inventory was started and completed during the year. Jordan completed production on 4,200 units of product and sold 3,220 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. (Round your answer to the nearest dollar amount.) e. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.) f. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the nearest dollar amount.) b. Total product cost Average cost per unit Cost of goods sold Ending inventory Net income Retained earnings Total assets

Answer 1

Ans:

Total product cost and average cost:

Direct Materials= 10,600

Direct labor= 15,200

Manufacturing overhead (26,800 -3,400)/3 = 7,800

Total product cost= 10,600+15,200+7,800

= $ 33,600

Units= 4,200

Average cost= 8.00 per unit

B). Amount of cost of goods sold that would appear on income statement:

Number of units sold= 3,220

Average cost= 8

Cost of goods sold= 3,220*8

= 25,760

C).Amount of ending inventory balance that would appear on dec 31,2018=

Number of units= 4,200

Number of units sold= 3,220

Ending inventory units= 980

Average cost per unit= 8

Ending inventory Balance= 980*$8

= $7,840

D). Amount of net income that would appear on income statement

Sales= (3,220*15) : 48,300

Less: Cost of goods sold= 25,760

Administrative salaries= 11,500

Depreciation on office furniture= (8,400/8) = 1050

Net income= 9,990

E). Amount of retained earnings=

Beginning retained earnings= 0

Add: net income= 9,990

Less: dividends= 0

Ending retained earnings= 9,990

F). Amount of total assets that would appear on dec 31,2018=

Cash= (83,000-8,400-26,800-11,500-15,200-10,600+48,300)= 58,800

Ending inventory= 7,840

office equipment= 8400-3400=5,000

Manufacturing equipment = (26,800-7,800)= 19,000

Total Assets= 58,800+7,840+5,000+19,000

= 90,640