Solution
Halpern Company
Financial Statements according to GAAP:
Halpern Company |
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Income Statement |
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Sales Revenue |
$40,000 |
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Less: Cost of Sales |
$25,000 |
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Gross Margin |
$15,000 |
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Less: Operating Expenses |
$16,000 |
|
Less: Research and development expenses |
$17,000 |
$33,000 |
Net Loss |
($18,000) |
|
Notes:
Cost of sales should include $5,000 (which is included in R&D costs) for materials that were wasted during production.
Operating expenses should include $8,000 that were included in the R&D costs.
The remaining R&D costs should be reported in the year of expense and hence the entire amount is reported in the income statement, $30,000 – 5,000 – 8,000 = $17,000.
Balance Sheet
Halpern Company |
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Balance Sheet |
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Accounts Payable |
$5,000 |
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Cash |
$33,000 |
Notes Payable |
$40,000 |
Inventory |
$24,000 |
Common Stock |
$50,000 |
Property, Plant and Equipment (net) |
$20,000 |
Retained Earnings |
($18,000) |
$77,000 |
$77,000 |
Notes:
problem 12-4 12.05 e cost of a paleta T in 2018 and 2019 June 30 Pald...
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