Question

Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows: $ 45,900 Morrison Company Balance Sheet January 1 Assets Cash Raw materials Work in process Finished goods Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $ 16,900 5,450 18,600 40,950 3,500 145,000 $ 235,350 $ 7,800 227,550 $ 235,350

Answer 1

1.

Transactions	Cash	Raw Materials	Work in Process	Finished Goods	Manufacturing Overhead	Prepaid Expenses	PP&E	=	Accounts Payable	Retained Earnings
Beginning Balances	$          45,900	$          16,900	$         5,450	$    18,600	$                       -	$    3,500	$ 145,000		$    7,800	$    227,550
a		$          78,200							$ 78,200
b		$        -91,600	$      77,000		$              14,600
c	$      -176,750		$      95,600		$              37,500					$    -43,650
d					$              39,900				$ 39,900
e					$              50,400		$   -72,000			$    -21,600
f	$        -33,650									$    -33,650
g					$                1,760	$   -2,200				$          -440
h			$    134,000		$          -134,000
i			$ -295,200	$ 295,200
j	$       402,280									$    402,280
k				$-290,200						$ -290,200
l	$        -71,200								$-71,200
m					$            -10,160					$    -10,160
Ending Balance	$       166,580	$            3,500	$      16,850	$    23,600	$                       -	$    1,300	$     73,000		$ 54,700	$    230,130

2. Net Operating Income = Change in retained earnings
= $230130-227550 = $2580