The following selected accounts and the current balances apper in the ledger of Acct 201 Co., for the fiscal year ended May 31, 2020.
To answer the questions below, it will be helpful to use a scratch piece of paper and prepare a multiple-step income statement (Note: not all of the listed accounts are used on the income statement. Select those that should appear on the income statement.)
Advertising Expense $550
Cost of Merchandise Sold 7,850
Customer Refunds Payable 40
Delivery Expense 16
Depreciation Expense-Office Equipment 50
Depreciation Expense-Store Equipment 140
Estimated Returns Inventory 22
Insurance Expense 48
Interest Expense 21
K.M., Capital 3,449
K.M., Drawing 50
Miscellaneous Administrative Expense 64
Miscellaneous Selling Expense 38
Office Salaries Expense 650
Office Supplies Expense 28
Rent Expense 94
Salaries Payable 41
Sales 11,343
Sales Salaries Expense 900
Required: Show details of your calculations. Label or identify the amounts used (abbreviations ok if we can understand them).
1. What is the amount of Gross Profit?
2. What is the amount of Total Operating Expenses?
3. What is the amount of Net Income?
4. What is the amount of Total Selling Expenses?
5. What is the amount of Total Administrative Expenses?
6. What is the amount of Income from Operations?
| Cash | $243,100 |
| Accounts receivable | 964,900 |
| Inventory | 1,788,600 |
| Estimated returns inventory | 21,200 |
| Office supplies | 17,800 |
| Prepaid insurance | 8,400 |
| Office equipment | 825,900 |
| Accumulated depreciation-office equipment | 543,800 |
| Store equipment | 3,609,700 |
| Accumulated depreciation-store equipment | 1,814,900 |
| Accounts payable | 356,300 |
| Customer refunds payable | 39,200 |
| Salaries payable | 44,100 |
| Note payable (final payment due in 6 years) | 289,000 |
| Common stock | 500,900 |
| Retained earnings | 3,143,700 |
| Dividends | 94,200 |
| Sales | 11,281,200 |
| Cost of goods sold | 7,858,000 |
| Sales salaries expense | 917,600 |
| Advertising expense | 551,900 |
| Depreciation expense-store equipment | 149,700 |
| Miscellaneous selling expense | 36,600 |
| Office salaries expense | 668,600 |
| Rent expense | 99,800 |
| Depreciation expense-office equipment | 56,200 |
| Insurance expense | 38,600 |
| Office supplies expense | 32,700 |
| Miscellaneous administrative expense | 7,900 |
| Interest expense | 21,700 |
| Required: | |
| 1. | Prepare a multiple-step income statement. Be sure to complete the statement heading. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. |
| 2. | Prepare a statement of stockholders’ equity. Additional common stock of $75,000 was issued during the year ended May 31, 20Y2. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. |
| 3. | Prepare a balance sheet, assuming that the current portion of the note payable is $42,000. Be sure to complete the statement heading. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. |
| 4. | Briefly explain how multiple-step and single-step income statements differ. |
| Cash | $ 238,400 |
| Accounts Receivable | 960,300 |
| Merchandise Inventory | 1,644,400 |
| Estimated Returns Inventory | 22,500 |
| Office Supplies | 6,500 |
| Prepaid Insurance | 3,900 |
| Office Equipment | 830,000 |
| Accumulated Depreciation-Office Equipment | 545,800 |
| Store Equipment | 3,601,100 |
| Accumulated Depreciation-Store Equipment | 1,823,000 |
| Accounts Payable | 365,400 |
| Customer Refunds Payable | 22,500 |
| Salaries Payable | 39,900 |
| Note Payable (final payment due 2022) | 308,000 |
| Kristina Marble, Capital | 3,410,300 |
| Kristina Marble, Drawing | 90,600 |
| Sales | 11,285,800 |
| Cost of Merchandise Sold | 7,857,300 |
| Sales Salaries Expense | 904,200 |
| Advertising Expense | 555,700 |
| Depreciation Expense-Store Equipment | 146,600 |
| Miscellaneous Selling Expense | 35,800 |
| Office Salaries Expense | 668,700 |
| Rent Expense | 96,200 |
| Depreciation Expense-Office Equipment | 41,000 |
| Insurance Expense | 46,800 |
| Office Supplies Expense | 24,900 |
| Miscellaneous Administrative Expense | 5,200 |
| Interest Expense | 20,600 |
| Required: | |
| 1. | Prepare a multiple-step income statement. In the Other revenue and Operating Expenses section only, enter amounts that represent Other revenue and Operating Expenses as negative numbers using a minus sign.* |
| 2. | Prepare a statement of owner’s equity. Use a minus (-) sign to indicate any negative amount.* |
| 3. | Prepare a report form of balance sheet, assuming that the current portion of the note payable is $56,900. “Less” or “Plus” will automatically appear if it is required.* |
| 4. | Which type of income statement shows intermediate balances? |
| *Be sure to complete the statement headings. Refer to the problem data and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. |
| Preferred 1% Stock, $50 par (100,000 shares authorized, 79,600 shares issued) | $3,980,000 |
| Paid-In Capital in Excess of Par—Preferred Stock | 159,200 |
| Common Stock, $3 par (5,000,000 shares authorized, 1,870,000 shares issued) | 5,610,000 |
| Paid-In Capital in Excess of Par—Common Stock | 1,215,500 |
| Retained Earnings | 31,497,000 |
| Jan. | 5 | Issued 532,900 shares of common stock at $9, receiving cash. |
| Feb. | 10 | Issued 11,000 shares of preferred 1% stock at $58. |
| Mar. | 19 | Purchased 45,400 shares of treasury stock for $8 per share. |
| May | 16 | Sold 21,400 shares of treasury stock for $10 per share. |
| Aug. | 25 | Sold 4,300 shares of treasury stock for $7 per share. |
| Dec. | 6 | Declared cash dividends of $0.50 per share on preferred stock and $0.07 per share on common stock. |
| 31 | Paid the cash dividends. |
Can you show me steps on how to prepare a cost of goods manufatures for the current year December 31?
Thanks carlos
The following selected account balances are provided for Delray Mfg.
| Sales | $ | 1,044,000 |
| Raw materials inventory, beginning | 41,000 | |
| Work in process inventory, beginning | 55,100 | |
| Finished goods inventory, beginning | 60,900 | |
| Raw materials purchases | 193,100 | |
| Direct labor | 227,000 | |
| Factory supplies used (indirect materials) | 18,500 | |
| Indirect labor | 46,000 | |
| Repairs—Factory equipment | 5,250 | |
| Rent cost of factory building | 54,000 | |
|
expense |
103,000 | |
| General and administrative expenses | 128,000 | |
| Raw materials inventory, ending | 41,900 | |
| Work in process inventory, ending | 41,000 | |
| Finished goods inventory, ending | 69,100 | |
PROBLEM 2-27 Schedule of Cost of Goods Manufactured; Income Statement; Cost Behavior
[LO1, LO2, LO3, LO4, LO5]
The following selected account balances for the year ended December 31 are provided for Valenko
Company
Advertising expense . . . . . . . . . . . . . . . . . . $215,000
Insurance, factory equipment. . . . . . . . . . . . $8,000
Depreciation, sales equipment. . . . . . . . . . . $40,000
Rent, factory building . . . . . . . . . . . . . . . . . . $90,000
Utilities, factory. . . . . . . . . . . . . . . . . . . . . . . $52,000
Sales commissions . . . . . . . . . . . . . . . . . . . $35,000
Cleaning supplies, factory . . . . . . . . . . . . . . $6,000
Depreciation, factory equipment . . . . . . . . . $110,000
Selling and administrative salaries. . . . . . . . $85,000
Maintenance, factory . . . . . . . . . . . . . . . . . . $74,000
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . ?
Purchases of raw materials . . . . . . . . . . . . . $260,000
Inventory balances at the beginning and end of the year were as follows
Beginning End of
of Year Year
Raw materials. . . . . . . . . . . $50,000 $40,000
Work in process. . . . . . . . . ? $33,000
Finished goods . . . . . . . . . $30,000 ?
The total manufacturing costs for the year were $675,000; the goods available for sale totaled
$720,000; and the cost of goods sold totaled $635,000.
Required:
1. Prepare a schedule of cost of goods manufactured and the cost of goods sold section of the company’s income statement for the year.
2. Assume that the dollar amounts given above are for the equivalent of 30,000 units produced
during the year. Compute the average cost per unit for direct materials used, and compute the
average cost per unit for rent on the factory building.
3. Assume that in the following year the company expects to produce 50,000 units. What average
cost per unit and total cost would you expect to be incurred for direct materials? For rent on the
factory building? (Assume that direct materials is a variable cost and that rent is a fi xed cost.)
4. As the manager in charge of production costs, explain to the president the reason for any difference in the average costs per unit between (2) and (3) above.
| Preferred 2% Stock, $100 par (100,000 shares authorized, 80,000 shares issued) | $8,000,000 |
| Paid-In Capital in Excess of Par—Preferred Stock | 440,000 |
| Common Stock, $5 par (5,000,000 shares authorized, 4,000,000 shares issued) | 20,000,000 |
| Paid-In Capital in Excess of Par—Common Stock | 2,280,000 |
| Retained Earnings | 115,400,000 |
| a. | Issued 200,000 shares of common stock at $12, receiving cash. |
| b. | Issued 8,000 shares of preferred 2% stock at $115. |
| c. | Purchased 175,000 shares of treasury common for $10 per share. |
| d. | Sold 110,000 shares of treasury common for $14 per share. |
| e. | Sold 30,000 shares of treasury common for $8 per share. |
| f. | Declared cash dividends of $1.25 per share on preferred stock and $0.08 per share on common stock. |
| g. | Paid the cash dividends. |
| Cash | $ 243,100 |
| Accounts Receivable | 964,900 |
| Merchandise Inventory | 1,788,600 |
| Estimated Returns Inventory | 22,500 |
| Office Supplies | 19,700 |
| Prepaid Insurance | 6,400 |
| Office Equipment | 828,400 |
| Accumulated Depreciation-Office Equipment | 545,900 |
| Store Equipment | 3,593,800 |
| Accumulated Depreciation-Store Equipment | 1,829,700 |
| Accounts Payable | 360,900 |
| Customer Refunds Payable | 22,500 |
| Salaries Payable | 41,000 |
| Note Payable (final payment due 2022) | 298,000 |
| Kristina Marble, Capital | 3,583,500 |
| Kristina Marble, Drawing | 102,600 |
| Sales | 11,287,400 |
| Cost of Merchandise Sold | 7,850,900 |
| Sales Salaries Expense | 919,600 |
| Advertising Expense | 549,100 |
| Depreciation Expense-Store Equipment | 148,000 |
| Miscellaneous Selling Expense | 35,500 |
| Office Salaries Expense | 644,000 |
| Rent Expense | 103,700 |
| Depreciation Expense-Office Equipment | 42,000 |
| Insurance Expense | 39,900 |
| Office Supplies Expense | 33,900 |
| Miscellaneous Administrative Expense | 20,700 |
| Interest Expense | 11,600 |
| Required: | |
| 1. | Prepare a multiple-step income statement. In the Other revenue and Operating Expenses section only, enter amounts that represent Other revenue and Operating Expenses as negative numbers using a minus sign.* |
| 2. | Prepare a statement of owner’s equity. Use a minus (-) sign to indicate any negative amount.* |
| 3. | Prepare a report form of balance sheet, assuming that the current portion of the note payable is $54,600. “Less” or “Plus” will automatically appear if it is required.* |
| 4. | Which type of income statement shows intermediate balances? |
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