Managerial Accounting 1-23A

Managerial Accounting 1-23A - Problem 1-23A Importance of...

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Problem 1-23A Importance of Cost Classification A.) Income Statements Option 1 Option 2 Sales Revenue (3000 x $14) $42,000 $42,000 Cost of Goods Sold $(18,000) $(30,000) Gross Margin $24,000 $12,000 Selling and Administrative Expense $(16,000) 0 Net Income $8,000 $12,000 Balance Sheets Option 1 Option 2 Assets Cash $42,000 $42,000 Inventory $6,000 $10,000 Total Assets $48,000 $52,000 Stockholders' Equity Common Stock $40,000 $40,000 Retained Earnings $8,000 $12,000 Total Stockholders' Equity $48,000 $52,000 Statement of Cash Flows Option 1 Option 2 Operating Activities Inflow from Customers $42,000 $42,000 Outflow for Inventory $(24,000) $(40,000) $(16,000) 0 Net Inflow from Operatin Activities $2,000 $2,000 Investing Activities 0 0 Financing Activities Acquistion of Capital $40,000 $40,000 Net Change in Cash $42,000 $42,000 Beginning Cash Balance 0 0 Ending Cash Balance $42,000 $42,000 1. BMC aquires $40,000 in common stock 2. BMC incurred specifically identifiable product costs (materials, labor, overhead) of $24,000
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This note was uploaded on 09/10/2008 for the course E/M 230 taught by Professor Barnette during the Fall '08 term at Gustavus.

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Managerial Accounting 1-23A - Problem 1-23A Importance of...

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