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Exercise 1-7 Balance sheet identification and preparation LO C4
 
Current assets for two different companies at fiscal year-end 2017 are listed here.
One is a manufacturer, Rayzer Skis Mfg., and the other, Sunrise Foods, is a grocery distribution company.
 

Account	Company 1				Company 2
Cash		$	11,000			$	9,000
Raw materials inventory			—				37,125
Merchandise inventory			40,125				—
Work in process inventory			—				27,000
Finished goods inventory			—				47,000
Accounts receivable, net			55,000				70,000
Prepaid expenses			4,500				900

 
Required:
(1) Identify which set of numbers relates to the manufacturer and which to the merchandiser.
(2) Prepare the current asset section for each company from this information.
Complete this question by entering your answers in the tabs below.
 
Req 1
 



   
Exercise 1-11 Cost of goods sold computation LO P1
 

	Unimart				Precision Manufacturing
Beginning inventory
Merchandise		$	321,000
Finished goods						$	642,000
Cost of purchases			530,000
Cost of goods manufactured							910,000
Ending inventory
Merchandise			221,000
Finished goods							215,000

Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.
 
4 a
Problem 1-1A Cost computation, classification, and analysis LO C2, C3
[The following information applies to the questions displayed below.]

 
Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $534 each.
  

	Costs
1.	Plastic for casing—$22,000
2.	Wages of assembly workers—$81,000
3.	Property taxes on factory—$6,000
4.	Accounting staff salaries—$36,000
5.	Drum stands (1,000 stands purchased)—$35,000
6.	Rent cost of equipment for sales staff—$36,000
7.	Upper management salaries—$210,000
8.	Annual flat fee for factory maintenance service—$21,000
9.	Sales commissions—$12 per unit
10.	Machinery depreciation, straight-line—$45,000

 
Problem 1-1A Part 1
Required:
1. Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.)
  
 
4B
Required information
Problem 1-1A Cost computation, classification, and analysis LO C2, C3
[The following information applies to the questions displayed below.]

 
Listed here are the total costs associated with the 2017 production of 1,000 drum sets manufactured by TrueBeat.
The drum sets sell for $534 each.
  

	Costs
1.	Plastic for casing—$22,000
2.	Wages of assembly workers—$81,000
3.	Property taxes on factory—$6,000
4.	Accounting staff salaries—$36,000
5.	Drum stands (1,000 stands purchased)—$35,000
6.	Rent cost of equipment for sales staff—$36,000
7.	Upper management salaries—$210,000
8.	Annual flat fee for factory maintenance service—$21,000
9.	Sales commissions—$12 per unit
10.	Machinery depreciation, straight-line—$45,000

 
Problem 1-1A Part 2
2. Calculate the manufacturing cost per drum set.

 
 
Listed here are product costs for the production of soccer balls.
Identify each cost (a) as either fixed or variable and (b) as either direct or indirect by selecting the appropriate dropdowns.
 

   
TechPro offers instructional courses in e-commerce website design. The company holds classes in a building that it owns.
Identify each of TechPro’s costs below as (a) variable or fixed and (b) direct or indirect by selecting the appropriate dropdowns.
Assume the cost object is an individual class.
 

 
Current assets for two different companies at fiscal year-end are listed here. One is a manufacturer, Rayzer Skis Mfg.,
and the other, Sunrise Foods, is a grocery distribution company.
 

Account	Company 1	Company 2
Cash	$11,000	$9,000
Raw materials inventory	—	39,875
Merchandise inventory	42,875	—
Work in process inventory	—	29,000
Finished goods inventory	—	49,000
Accounts receivable, net	61,000	71,000
Prepaid expenses	3,500	700

 
Required:

1. Identify which set of numbers relates to the manufacturer and which to the merchandiser.
2a. & 2b. Prepare the current asset section for each company from this information.
 

   
The following data is provided for Garcon Company and Pepper Company.
 

Garcon Company

Pepper Company

 

Beginning finished goods inventory	$12,900	$17,500
Beginning work in process inventory	16,700	22,950
Beginning raw materials inventory (direct materials)	9,800	14,250
Rental cost on factory equipment	31,250	26,050
Direct labor	19,600	40,200
Ending finished goods inventory	18,050	14,300
Ending work in process inventory	24,100	16,600
Ending raw materials inventory	7,700	8,800
Factory utilities	10,500	15,000
Factory supplies used (indirect materials)	13,300	5,600
General and administrative expenses	23,000	54,500
Indirect labor	1,500	9,340
Repairs—Factory equipment	5,660	1,750
Raw materials purchases	47,000	57,000
Selling expenses	61,200	55,900
Sales	196,530	307,510
Cash	31,000	24,200
Factory equipment, net	282,500	139,825
Accounts receivable, net	13,600	21,200

Required:
1. Complete the table to find the cost of goods manufactured for both Garcon Company and Pepper Company
for the year ended December 31, 2019.
 


2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company
for the year ended December 31, 2019.
 

   
The following data is provided for Garcon Company and Pepper Company.
 

	Garcon Company	Pepper Company
Beginning finished goods inventory	$12,900	$17,500
Beginning work in process inventory	16,700	22,950
Beginning raw materials inventory (direct materials)	9,800	14,250
Rental cost on factory equipment	31,250	26,050
Direct labor	19,600	40,200
Ending finished goods inventory	18,050	14,300
Ending work in process inventory	24,100	16,600
Ending raw materials inventory	7,700	8,800
Factory utilities	10,500	15,000
Factory supplies used (indirect materials)	13,300	5,600
General and administrative expenses	23,000	54,500
Indirect labor	1,500	9,340
Repairs—Factory equipment	5,660	1,750
Raw materials purchases	47,000	57,000
Selling expenses	61,200	55,900
Sales	196,530	307,510
Cash	31,000	24,200
Factory equipment, net	282,500	139,825
Accounts receivable, net	13,600	21,200

 
Required:
1. Prepare income statements for both Garcon Company and Pepper Company.
 

2. Prepare the current assets section of the balance sheet for each company.

   
The following data is provided for Garcon Company and Pepper Company.

	Garcon Company	Pepper Company
Beginning finished goods inventory	$12,900	$17,500
Beginning work in process inventory	16,700	22,950
Beginning raw materials inventory (direct materials)	9,800	14,250
Rental cost on factory equipment	31,250	26,050
Direct labor	19,600	40,200
Ending finished goods inventory	18,050	14,300
Ending work in process inventory	24,100	16,600
Ending raw materials inventory	7,700	8,800
Factory utilities	10,500	15,000
Factory supplies used (indirect materials)	13,300	5,600
General and administrative expenses	23,000	54,500
Indirect labor	1,500	9,340
Repairs—Factory equipment	5,660	1,750
Raw materials purchases	47,000	57,000
Selling expenses	61,200	55,900
Sales	196,530	307,510
Cash	31,000	24,200
Factory equipment, net	282,500	139,825
Accounts receivable, net	13,600	21,200

 
Required:
1. Compute the total prime costs for both Garcon Company and Pepper Company.
 
 


2. Compute the total conversion costs for both Garcon Company and Pepper Company.
 

   

	Unimart	Precision Manufacturing
Beginning inventory
Merchandise	$321,000
Finished goods		$642,000
Cost of purchases	510,000
Cost of goods manufactured		840,000
Ending inventory
Merchandise	221,000
Finished goods		215,000

 
Compute cost of goods sold for each of these two companies for the year.
 

   
The following selected account balances are provided for Delray Mfg.
 

Sales	$1,155,000
Raw materials inventory, beginning	38,000
Work in process inventory, beginning	54,000
Finished goods inventory, beginning	65,100
Raw materials purchases	152,500
Direct labor	230,000
Factory supplies used (indirect materials)	24,500
Indirect labor	57,000
Repairs—Factory equipment	5,250
Rent cost of factory building	52,000
Advertising expense	84,000
General and administrative expenses	131,000
Raw materials inventory, ending	46,500
Work in process inventory, ending	39,000
Finished goods inventory, ending	68,300

 
Prepare its schedule of cost of goods manufactured for the current year ended December 31.
 

   
The following selected account balances are provided for Delray Mfg.
 

Sales	$1,155,000
Raw materials inventory, beginning	38,000
Work in process inventory, beginning	54,000
Finished goods inventory, beginning	65,100
Raw materials purchases	152,500
Direct labor	230,000
Factory supplies used (indirect materials)	24,500
Indirect labor	57,000
Repairs—Factory equipment	5,250
Rent cost of factory building	52,000
Advertising expense	84,000
General and administrative expenses	131,000
Raw materials inventory, ending	46,500
Work in process inventory, ending	39,000
Finished goods inventory, ending	68,300

 
Prepare an income statement for Delray Mfg. (a manufacturer).
 

   
Beck Manufacturing reports the following information in T-account form for 2019.
 

Raw Materials Inventory
Begin. Inv.	10,600
Purchases	56,000
Avail. for use	66,600
		DM used	49,000
End. Inv.	17,600

 

Work in Process Inventory
Begin. Inv.	15,200
DM used	49,000
Direct labor	29,500
Overhead	64,500
Manuf. costs	158,200
		Cost of goods manuf.	144,800
End. Inv.	13,400

 

Finished Goods Inventory
Begin. Inv.	20,200
Cost of goods manuf.	144,800
Avail. for sale	165,000
		Cost of Goods Sold	145,000
End. Inv.	20,000

 
Required:
1. Prepare the schedule of cost of goods manufactured for the year.
 


2. Compute cost of goods sold for the year.
 

   
The following calendar year-end information is taken from the December 31, 2019,
adjusted trial balance and other records of Leone Company.
 

Advertising expense	$28,000	Direct labor	$693,900
Depreciation expense—Office equipment	8,800	Income taxes expense	295,900
Depreciation expense—Selling equipment	10,600	Indirect labor	59,600
Depreciation expense—Factory equipment	36,100	Miscellaneous production costs	11,000
Factory supervision	120,300	Office salaries expense	70,000
Factory supplies used	9,800	Raw materials purchases	996,000
Factory utilities	42,000	Rent expense—Office space	27,000
Inventories		Rent expense—Selling space	26,400
Raw materials, December 31, 2018	159,100	Rent expense—Factory building	78,700
Raw materials, December 31, 2019	177,000	Maintenance expense—Factory equipment	36,700
Work in process, December 31, 2018	18,500	Sales	4,485,800
Work in process, December 31, 2019	24,000	Sales salaries expense	393,200
Finished goods, December 31, 2018	167,800
Finished goods, December 31, 2019	138,200

 
Required:
1. Prepare the company’s 2019 schedule of cost of goods manufactured.
 

   
The following calendar year-end information is taken from the December 31, 2019,
adjusted trial balance and other records of Leone Company.
 

Advertising expense	$28,000	Direct labor	$693,900
Depreciation expense—Office equipment	8,800	Income taxes expense	295,900
Depreciation expense—Selling equipment	10,600	Indirect labor	59,600
Depreciation expense—Factory equipment	36,100	Miscellaneous production costs	11,000
Factory supervision	120,300	Office salaries expense	70,000
Factory supplies used	9,800	Raw materials purchases	996,000
Factory utilities	42,000	Rent expense—Office space	27,000
Inventories		Rent expense—Selling space	26,400
Raw materials, December 31, 2018	159,100	Rent expense—Factory building	78,700
Raw materials, December 31, 2019	177,000	Maintenance expense—Factory equipment	36,700
Work in process, December 31, 2018	18,500	Sales	4,485,800
Work in process, December 31, 2019	24,000	Sales salaries expense	393,200
Finished goods, December 31, 2018	167,800
Finished goods, December 31, 2019	138,200

 
2. Prepare the company’s 2019 income statement that reports separate categories for
(a) selling expenses and (b) general and administrative expenses.
 

   
Shown here are annual financial data taken from two different companies.

	Music World Retail	Wave-Board Manufacturing
Beginning inventory
Merchandise	$225,000
Finished goods		$320,000
Cost of purchases	310,000
Cost of goods manufactured		590,000
Ending inventory
Merchandise	160,000
Finished goods		150,000

 
Required:

1. Prepare the cost of goods sold section of the income statement for the year for each company in
Merchandising Business and Manufacturing Business.
 
 
Last year Burford Company's cash account decreased by $19,000. Net cash used in investing activities was $9,000. Net cash provided by financing activities was $16,000. On the statement of cash flows, the net cash flow provided by (used in) operating activities was:
 
$(19,000)
$(26,000)
$(12,000)
$7,000

Homework  1.1 1.2  2.1 2.2  3.1 3.2  4.1 4.2 5.1 5.2  6.1 6.2  7.1  7.2  8.1  8.2  9.1   9.2  10.1  10.2  11.1  11.2  12.1 12.2  13.1  13.2  14.1  14.2  15.1   15.2
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