ACTG 2P12 Chapter Notes - Chapter 6: Finished Good, Income Statement
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1.A key difference between managerial and financial accounting is that
Managerial is only historical data and financial is only future data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Managerial users are typically internal and financial users typically external | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Managerial is highly regulated and financial is not | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial uses much more economic data than managerial
--------------------- 3.Major inventory accounts in a manufacturing environment typically include all of the following except
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Gold Nest Company of Guandong, China, is a family-ownedenterprise that makes birdcages for the South China market. Thecompany sells its birdcages through an extensive network of streetvendors who receive commissions on their sales. All of thecompanyâs transactions with customers, employees, and suppliers areconducted in cash; there is no credit. |
The company uses a job-order costingsystem in which overhead is applied to jobs on the basis of directlabor cost. Its predetermined overhead rate is based on a costformula that estimated $67,500 of manufacturing overhead for anestimated activity level of $45,000 direct labor dollars. At thebeginning of the year, the inventory balances were as follows: |
Raw materials | $ | 10,800 |
Work in process | $ | 4,200 |
Finished goods | $ | 8,800 |
During the year, the followingtransactions were completed: |
a. | Raw materialspurchased for cash, $167,000. |
b. | Raw materials requisitioned for use in production, $141,000(materials costing $125,000 were charged directly to jobs; theremaining materials were indirect). |
c. | Costs for employeeservices were incurred as follows: |
Direct labor | $ | 177,000 |
Indirect labor | $ | 187,100 |
Sales commissions | $ | 24,000 |
Administrative salaries | $ | 47,000 |
d. | Rent for the year was $18,600 ($13,300 of this amount related tofactory operations, and the remainder related to selling andadministrative activities). |
e. | Utility costsincurred in the factory, $18,000. |
f. | Advertising costsincurred, $12,000. |
g. | Depreciation recorded on equipment, $24,000. ($17,000 of thisamount was on equipment used in factory operations; the remaining$7,000 was on equipment used in selling and administrativeactivities.) |
h. | Manufacturing overhead cost was applied to jobs, $? |
i. | Goods that had cost$227,000 to manufacture according to their job cost sheets werecompleted. |
j. | Sales for the year totaled $515,000. The total cost tomanufacture these goods according to their job cost sheets was$215,000. |
Required:
1. | Prepare journal entries to record the transactions for the year.(If no entry is required for a transaction/event, select"No journal entry required" in the first account field. Round yourintermediate calculations to 2 decimal places.)
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