ACCT 5301 Lecture Notes - Gross Profit, Income Statement, Current Asset

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cheyannmiller

18 Nov 2022

School

Texas Tech University

Department

Accounting (Graduate Courses)

Course

ACCT 5301

Professor

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Document Summary

Inventory is the raw materials used to produce goods as well as the goods that are available for sale. It is classified as a current asset on a company"s balance sheet: when inventory is purchased or produced, it is capitalized on the balance sheet. Capitalization means that a cost is recorded on the balance sheet and is not immediately expensed in the income statement: when the inventory is sold, its cost is transferred from the balance sheet to the. Important: because companies can choose among various inventory costing methods, financial statements are not comparable, different prices at different times. Ppe assets capitalization & depreciation: when ppe is acquired, it is recorded at cost (what you paid for it) on the balance sheet. Straight-line method: assume that a company acquires a machine as follows, with straight-line (sl) method, ,000 depreciation expense is recognized per year, over the asset"s estimated useful life.

Related Questions

Finished goods inventory is reported on the

a. balance sheet as a long-term asset.

b. balance sheet as a current asset.

c. income statement as revenue.

c. income statement as a period cost.

orchidraccoon98

please answer it in an hour I'll rate emergencythanks

Zoe Corporation has the following information for the month ofMarch:

Purchases	$92,000
Materials inventory, March 1	6,000
Materials inventory, March 31	8,000
Direct labor	25,000
Factory overhead	37,000
Work in process inventory, March1	22,000
Work in process inventory, March31	23,500
Finished goods inventory, March1	21,000
Finished goods inventory, March31	30,000
Sales	257,000
Selling and administrativeexpenses	79,000

Required:

Prepare (a) a schedule of costof goods manufactured, (b) an income statement for the month endedMarch 31, and (c) the Inventory section of the balance sheet. Referto the Labels and Amount Descriptions provided for the exactwording of the answer choices for text entries. Be sure to completethe statement heading. âLessâ or âPlusâ will automatically appearif it is required. You will not need to enter colons (:) on thefinancial statements. Enter all amounts as positivenumbers.

Labels and Amount Descriptions

Labels
Direct materials
For the Month Ended March 31
Inventories
March 31
Operating expenses
Amount Descriptions
Beginning finished goodsinventory
Beginning materials inventory
Beginning work in processinventory, March 1
Cost of finished goods availablefor sale
Cost of goods manufactured
Cost of goods sold
Cost of materials available foruse
Cost of materials used
Direct labor
Ending finished goodsinventory
Ending materials inventory
Ending work in processinventory
Factory overhead
Finished goods
Gross profit
Materials
Net income
Net loss
Purchases
Sales
Selling and administrativeexpenses
Total inventories
Total manufacturing costs
Total manufacturing costsincurred
Work in process

Statement of Cost of Goods Manufactured

Prepare a schedule of cost of goods manufactured. Refer to theLabels and Amount Descriptions provided for the exact wording ofthe answer choices for text entries. Be sure to complete thestatement heading. âLessâ or âPlusâ will automatically appear if itis required. You will not need to enter colons (:) on the statementof cost of goods manufactured. Enter all amounts as positivenumbers.

Zoe Corporation

Statement of Cost of Goods Manufactured

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Income Statement

Prepare an income statement for the month ended March 31. Referto the Labels and Amount Descriptions provided for the exactwording of the answer choices for text entries. Be sure to completethe statement heading. âLessâ or âPlusâ will automatically appearif it is required. You will not need to enter colons (:) on theincome statement.

Zoe Corporation

Income Statement

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Partial Balance Sheet

Prepare the Inventory section of the balance sheet. Refer to theLabels and Amount Descriptions provided for the exact wording ofthe answer choices for text entries. Be sure to complete thestatement heading. You will not need to enter colons (:) on thebalance sheet.

Zoe Corporation

Partial Balance Sheet

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scarletdolphin760

For each of the following potential unrecorded liabilities, determine the effects of the omission on both the balance sheet and income statement of the client. Assume that the inventories recorded on the balance sheet reflect the results of a year-end (December 31) physical inventory. (If there is no effect select "No effect" from dropdown.)

An invoice for $3,000 worth of inventory items, dated January 1 and bearing terms of FOB destination, was not recorded. The goods were shipped December 27 and were received on December 30.

Balance Sheet Effect:

Income Statement Effect:

An invoice for $5,500 worth of inventory items, dated December 30 and bearing terms of FOB destination, was not recorded. The goods were shipped December 28 and received January 2.

Balance Sheet Effect:

Income Statement Effect:

An invoice for $8,000 for a delivery truck, dated January 2 and bearing terms of FOB shipping point, was not recorded. The truck was shipped December 30 and received on January 3.

Balance Sheet Effect:

Income Statement Effect:

An invoice for $1,000 for legal fees rendered in December was not recorded.

Balance Sheet Effect:

Income Statement Effect:

greenzebra831

ACCT 5301 Lecture Notes - Gross Profit, Income Statement, Current Asset

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