AFM101 Chapter Notes - Chapter 8: Perpetual Inventory, Weighted Arithmetic Mean, Current Asset

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scarletpanda765

25 Aug 2016

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM101

Professor

Duane Kennedy

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AFM101 Full Course Notes

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Reporting and interpreting cost of sales and inventory. Merchandisers: companies that do not manufacture the products they sell, but simply purchase those products then sell them to customers. Items acquired by purchase, growth (food), or extraction (natural resources) for processing into finished goods. Included in raw materials inventory until used, at which point they become part of work-in-process inventory. Manufactured goods that are complete and available for sale. Cost principle: primary basis for accounting for inventory is cash equivalent cost that was paid to acquire the asset. Inventory costs include the sum of expenditures and charges (directly/indirectly) incurred in bringing an article to a usable or saleable condition and location (not current value) Include the invoice price and indirect expenditures related to the purchase, such as import duties; freight charges, inspection and preparation costs (not a lot; sometimes just recorded as expense)

Related Questions

Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary:


Cash	$	184,600
Raw materials inventory		3,680
Work in process inventory		5,530
Finished goods inventory		6,450
Common stock			$	119,060
Retained earnings				81,200
Totals	$	200,260	$	200,260

The subsidiary completed the following transactions during 2017:

1. Paid $55,380 cash for direct raw materials.

2. Transferred $46,160 of direct raw materials to work in process.

3. Paid production employees $73,860 cash.

4. Applied $48,910 of manufacturing overhead costs to work in process.

5. Completed work on products that cost $150,410.

6. Sold products that cost $131,950 for $167,950 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.

7. Paid $18,450 cash for selling and administrative expenses.

8. Actual overhead costs paid in cash amounted to $50,710.

9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).

10. Made a $4,580 cash distribution to the owners

REQUIRED

A. Prepare a schedule of cost of goods manufactured and sold.

ANYWHERE, INC.
Schedule of Cost of Goods Manufactured and Sold
For Year Ended December, 31 2017
Beginning raw materials inventory
Purchases
Raw materials available for use	0
Ending raw materials inventory
Direct raw materials used	0
Direct labor
Manufacturing overhead
Total manufacturing costs	0
Beginning work in process inventory
Total work in process inventory	0
Ending work in process inventory
Cost of goods manufactured	0
Beginning finished goods inventory
Cost of goods available for sale	0
Ending finished goods inventory
Cost of goods sold	$0

coffeegoose683

Required information

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

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

	Garcon Company			Pepper Company
Beginning finished goods inventory		$	12,100	$	17,950
Beginning work in process inventory			19,000		23,100
Beginning raw materials inventory			11,700		10,050
Rental cost on factory equipment			28,750		25,900
Direct labor			20,600		37,400
Ending finished goods inventory			20,600		13,100
Ending work in process inventory			22,900		21,600
Ending raw materials inventory			6,800		9,200
Factory utilities			10,650		14,000
Factory supplies used			11,500		5,100
General and administrative expenses			31,500		56,000
Indirect labor			2,350		8,680
RepairsâFactory equipment			7,340		3,750
Raw materials purchases			37,000		63,500
Selling expenses			57,200		48,100
Sales			204,030		327,510
Cash			22,000		21,700
Factory equipment, net			232,500		148,825
Accounts receivable, net			15,800		24,950
Exercise 14-8 Cost of goods manufactured and cost of goods sold computation LO P1, P2 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, 2017. 2. Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company for the year ended December 31, 2017.

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, 2017.

	Garcon Company	Pepper Company
Direct materials


Raw materials available for use	0	0

Direct materials used	0	0

Factory overhead






Total factory overhead	0	0
Total manufacturing costs

Total cost of work in process	0	0

Cost of goods manufactured	$0	$0

Required 2:.

Complete the table to calculate the cost of goods sold for both Garcon Company and Pepper Company for the year ended December 31, 2017.

	Garcon Company	Pepper Company
Cost of goods available for sale
Cost of goods sold	$0	$0

ultramarinetrout400

I need to Prepare entries for a job order, cost system, and cost of goods manufactured schedule, but my numbers aren't matching up. Please answer both parts of the question.

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

P15-3A Prepare entries for a job order cost system and cost of goods manufactured schedule
Case Inc. is a construction company specializing in custom patios. The patios are constructed of
concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017,
the general ledger for Case Inc. contains the following data.

Raw Materials Inventory			$4,200		Manufacturing Overhead Applied		$32,640
Work in Process Inventory			$5,540		Manufacturing Overhead Incurred		$31,650

Subsidiary data for Work in Process Inventory on June 1 are as follows.

	Job Cost Sheets
			Customer Job
	Cost Element		Rodgers		Stevens	Linton
	Direct materials		$600		$800	$900
	Direct labor		320		540	580
	Manufacturing overhead		400		675	725
			$1,320		$2,015	$2,205

During June, raw materials purchased on account were $4,900, and all wages were paid. Additional
overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred
on account.
A summary of materials requisition slips and time tickets for June show the following.

	Customer Job		Materials Requisition slips		Time tickets
	Rodgers		$ 800		$850
	Koss		2,000		800
	Stevens		500		360
	Linton		1,300		1,200
	Rodgers		300		390
			4,900		3,600
	General use		1,500		1,200
			$ 6,400		$4,800

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for
customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $18,900.
Each customer paid in full.

Instructions
(a)	Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred,
	and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to
	production; and (3) completion of jobs and sale of goods.
(b)	Post the entries to Work in Process Inventory.
(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
(d)	Prepare a cost of goods manufactured schedule for June.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .



(a)(1)	Journalize the June transactions for purchase of raw materials, factory labor costs incurred,
	and manufacturing overhead costs incurred

	Raw Malerials Inventory
		Accounts Payable


	Factory Labor
		Cash


	Manufacturing Overhead
		Accumulated Depreciation- Equipment
		Accounts Payable


(a)(2)	Journalize the June transactions for assignment of direct materials, labor, and overhead to production

	Work in Pricess Inventory
	Manufacturing Overhead
		Raw Malerials Inventory


	Work in Pricess Inventory
	Manufacturing Overhead
		Factory Labor


	Work in Pricess Inventory
		Manufacturing Overhead


(a)(3)	Journalize the June transactions for completion of jobs and sale of goods.

	Finished Goods Inventory
		Work in Process Inventory


	Cash
		Sales


	Cost of Goods Sold
		Finished Goods Inventory


(b)	Post the entries to Work in Process Inventory.

	Work in Process Inventory
	6/1	Balance		June	Completed work
		Direct Materials
		Direct labor
		Overhead applied

	6/30	Balance


(c )	Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.

	6/30 balance in Work in Process Inventory
	Unfinished Job (Koss)
	Direct materials
	Direct labor
	Manufacturing overhead



(d)	Prepare a cost of goods manufactured schedule for June.

	CASE INC.
	Cost of Goods Manufactured Schedule
	For the Month Ended June 30, 2017

	Work in process, June 1
	Direct materials used
	Direct labor
	Manufacturing overhead applied
	Total manufacturing costs
	Total cost of work in process
	Less: Work in process, June 30
	Cost of goods manufactured



After you have completed P15-3A, consider the following additional question.
1.	Assume that indirect labor and raw materials purchases changed to $1,400 and $6,800 respectively.
	Also assume that overhead is applied at the rate of $1.50 per dollar of direct labor. The three
	completed jobs were sold for $22,000 cash. Revise the journal entries to reflect these changes.

turquoisewater-buffalo175

AFM101 Chapter Notes - Chapter 8: Perpetual Inventory, Weighted Arithmetic Mean, Current Asset

AFM101 Full Course Notes

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