Answer:
Depreciation of office furniture = $9,800/8 = $1,225 per year | ||
Depreciation of Equipment = ($31,000 - $3,400) / 4 = $6,900 per year |
a) total product cost and the average cost per unit of the inventory produced in 2018: | |
Raw Material | 11,540 |
Wages | 15,900 |
Depreciation- equipment | 6,900 |
Total Product Cost | 34,340 |
Number of units produced | 4,200 |
Per unit product cost | 8.18 |
b) amount of cost of goods sold that would appear on the 2018 income statement: | |
Raw Material | 11,540 |
Wages | 15,900 |
Depreciation- equipment | 6,900 |
Total Product Cost | 34,340 |
Less: Cost of ending inventory(950 units @ 8.18 per unit) | 7,771 |
Cost of Goods Sold | 26,569 |
c) amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet: | |
Raw Material | 11,540 |
Wages | 15,900 |
Depreciation- equipment | 6,900 |
Total Product Cost | 34,340 |
Number of units produced | 4,200 |
Per unit product cost | 8.18 |
Cost of ending inventory(950 units @ 8.18per unit) | 7,771 |
d) amount of net income that would appear on the 2018 income statement: | ||
Sales Revenue (3,250*$16) | 52,000 | |
Less: cost of goods sold | 26,569 | |
Gross Margin | 25,431 | |
Less: Operating costs | ||
Administrative salary | 11,700 | |
Depreciation-office furniture | 1,225 | |
Total operating expense | 12,925 | |
Net Income | 12,506 |
e) Amount of retained earnings that would appear on the December 31, 2018, balance sheet: | ||
Retained Earnings = $12,506 |
Franklin Manufacturing Company was started on January 1, 2018, when it acquired $90,000 cash by issuing...
Franklin Manufacturing Company was started on January 1, 2018, when it acquired $90,000 cash by issuing common stock. Franklin immediately purchased office furniture and manufacturing equipment costing $9,800 and $31,400, respectively. The office furniture had an 8-year useful life and a zero salvage value. The manufacturing equipment had a $3,400 salvage value and an expected useful life of four years. The company paid $11,700 for salaries of administrative personnel and $15,900 for wages to production personnel. Finally, the company paid...
Walton Manufacturing Company was started on January 1, 2018, when it acquired $90,000 cash by issuing common stock. Walton immediately purchased office furniture and manufacturing equipment costing $7,000 and $32,200, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,000 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of administrative personnel and $15,900 for wages to production personnel. Finally, the company paid...
Munoz Manufacturing Company was started on January 1, 2018, when it acquired $90,000 cash by issuing common stock. Munoz immediately purchased office furniture and manufacturing equipment costing $8,400 and $34,900, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,300 salvage value and an expected useful life of four years. The company paid $11,600 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid...
Vernon Manufacturing Company was started on January 1, 2018, when it acquired $84,000 cash by issuing common stock. Vernon immediately purchased office furniture and manufacturing equipment costing $7,700 and $25,300, respectively. The office furniture had an 8-year useful life and a zero salvage value. The manufacturing equipment had a $3,100 salvage value and an expected useful life of three years. The company paid $11,400 for salaries of administrative personnel and $15,100 for wages to production personnel. Finally, the company paid...
Walton Manufacturing Company was started on January 1, 2018, when it acquired $82,000 cash by issuing common stock. Walton immediately purchased office furniture and manufacturing equipment costing $9,100 and $25,700, 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 $11,700 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid...
Stuart Manufacturing Company was started on January 1, 2018, when it acquired $78,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $9,100 and $26,900, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,200 salvage value and an expected useful life of three years. The company paid $11,800 for salaries of administrative personnel and $15,200 for wages to production personnel. Finally, the company paid...
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...
Finch Manufacturing Company was started on January 1, 2018, when it acquired $83,000 cash by issuing common stock. Finch immediately purchased office furniture and manufacturing equipment costing $8,400 and $31,600, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,600 salvage value and an expected useful life of four years. The company paid $11,200 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid...
Zachary Manufacturing Company was started on January 1, 2018, when it acquired $81,000 cash by issuing common stock. Zachary immediately purchased office furniture and manufacturing equipment costing $7,000 and $24,500, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,200 salvage value and an expected useful life of three years. The company paid $11,400 for salaries of administrative personnel and $15,200 for wages to production personnel. Finally, the company paid...
Perez Manufacturing Company was started on January 1, 2018, when it acquired $79,000 cash by issuing common stock. Perez immediately purchased office furniture and manufacturing equipment costing $8,400 and $25,300, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of three years. The company paid $11,300 for salaries of administrative personnel and $15,100 for wages to production personnel. Finally, the company paid...