Hoen Manufacturing Company experienced the following accountingevents during its first year of operation. With the exception ofthe adjusting entries for depreciation, all transactions are cashtransactions.
1. Acquired $50,000 cash by issuing common stock.
2.Paid $8,000 for the materials used to make products, all of whichwere started and completed during the year.
3.Paid salaries of $ 4,400 to selling and administrativeemployees.
4.Paid wages of $7,000 to production workers.
5.Paid $ 9,600 for furniture used in selling and administrativeoffices. The furniture was acquired on January 1. It had a $1,600estimated salvage value and a four- year useful life.
6.Paid $13,000 for manufacturing equipment. The equipment wasacquired on January 1. It had a $1,000 estimated salvage value anda three- year useful life.
7.Sold inventory to customers for $25,000 that had cost $14,000 tomake
Required
Explain how these events would affect the balance sheet, incomestatement, and statement of cash flows by recording them in ahorizontal financial statements model as indicated here. The firstevent is recorded as an example. In the Cash Flow column, indicatewhether the amounts represent financing activities (FA), investingactivities (IA), or operating activities (OA).
1. Acquired $50,000 cash by issuing common stock.
2.Paid $8,000 for the materials used to make products, all of whichwere started and completed during the year.
3.Paid salaries of $ 4,400 to selling and administrativeemployees.
4.Paid wages of $7,000 to production workers.
5.Paid $ 9,600 for furniture used in selling and administrativeoffices. The furniture was acquired on January 1. It had a $1,600estimated salvage value and a four- year useful life.
6.Paid $13,000 for manufacturing equipment. The equipment wasacquired on January 1. It had a $1,000 estimated salvage value anda three- year useful life.
7.Sold inventory to customers for $25,000 that had cost $14,000 tomake
Required
Explain how these events would affect the balance sheet, incomestatement, and statement of cash flows by recording them in ahorizontal financial statements model as indicated here. The firstevent is recorded as an example. In the Cash Flow column, indicatewhether the amounts represent financing activities (FA), investingactivities (IA), or operating activities (OA).
Related questions
Issa Manufacturing Company was started on January 1, 2014, whenit acquired $80,000 cash by issuing common stock. Issa immediatelypurchased office furniture and manufacturing equipment costing$9,500 and $27,100, respectively. The office furniture had aseven-year useful life and a zero salvage value. The manufacturingequipment had a $4,000 salvage value and an expected useful life ofthree years. The company paid $11,400 for salaries ofadministrative personnel and $15,400 for wages to productionpersonnel. Finally, the company paid $8,880 for raw materials thatwere used to make inventory. All inventory was started andcompleted during the year. Issa completed production on 4,100 unitsof product and sold 3,150 units at a price of $15 each in 2014.(Assume that all transactions are cash transactions.) |
| Required | |
| a. | Determine the total product cost and the average cost per unitof the inventory produced in 2014. (Round "Average cost perunit" answer to 2 decimal places.) |
| b. | Determine the amount of cost of goods sold that would appear onthe 2014 income statement. (Do not round intermediatecalculations. Round your answer to the nearest dollaramount.) |
| c. | Determine the amount of the ending inventory balance that wouldappear on the December 31, 2014, balance sheet. (Do notround intermediate calculations. Round your answer to the nearestdollar amount.) |
| d. | Determine the amount of net income that would appear on the 2014income statement. (Round your answer to the nearest dollaramount.) |
| e. | Determine the amount of retained earnings that would appear onthe December 31, 2014, balance sheet. (Round your answer tothe nearest dollar amount.) |
| f. | Determine the amount of total assets that would appear on theDecember 31, 2014, balance sheet.(Round your answer to thenearest dollar amount.) |
| g. | Determine the amount of net cash flow from operating activitiesthat would appear on the December 31, 2014 statement of cash flows.(List cash outflow as negative amount.) |
| h. | Determine the amount of net cash flow from investing activitiesthat would appear on the December 31, 2014 statement of cash flows.(List cash outflow as negative amount.) |
