Problems Chapter 10

Problems Chapter 10 - Problem 10-17 The following...

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Problem 10-17 The following horizontal financial statements model is not required in the problem.  It is provided to show  the process of computation. Event Assets = Equity Income Statement Office Manuf. Cont. Cash No. Cash + Invent. + Furn.* + Equip*. = Cap. + Ret. Ear. Rev. Exp. = Net Inc. Flow 1 90,000 + + + = 90,000 + = 90,000 FA 2a (10,000) + + 10,000 + = + = (10,000) IA 2b + + (2,000) + = + (2,000) 2,000 = (2,000) 3a (28,000) + + + 28,000 = + = (28,000) IA 3b + 8,000 + + (8,000) = + = 4 (12,000) + + + = + (12,000) 12,000 = (12,000) (12,000) OA 5 (16,000) + 16,000 + + = + = (16,000) OA 6 (18,000) + 18,000 + + = + = (18,000) OA 7a 48,000 + + + = + 48,000 48,000 = 48,000 48,000 OA 7b + (33,600) + + = + (33,600) 33,600 = (33,600) Total 54,000 + 8,400 + 8,000 + 20,000 = 90,000 + 400 48,000 47,600 = 400 54,000
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*Record accumulated depreciation as negative amounts under these columns .
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Problem 10-17 (continued) a. Direct Materials $18,000 Direct Labor 16,000 Manufacturing Overhead 8,000* Total Product Cost 42,000 Divided by ÷  5,000 Average Cost Per Unit $8.40 * Depreciation of manufacturing equipment:  ($28,000  -  $4,000)  ÷  3 = $8,000 b. Cost of goods sold: $8.40 x 4,000 = $33,600 c. Ending inventory: $8.40 x (5,000  -  4,000) = $8,400 d. $400 ($48,000 – 33,600 – $12,000 – $2,000*) *Depreciation of Office Furniture: $10,000  ÷  5 = $2,000 e. $400 f.
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