In-Class Demos

In-Class Demos - Exercise 1-2A Identifying product versus...

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Exercise 1-2A Identifying product versus general, selling, and administrative costs LO 2, 3 Required: Indicate whether each of the following costs should be classified as a product cost or as a selling, general, and administrative cost. a. Salaries of employees working in the accounting department. b. Commissions paid to sales staff. c. Interest on the mortgage for the company's corporate headquarters. d. Indirect labor used to manufacture inventory. e. Attorney's fees paid to protect the company from frivolous lawsuits. f. Research and development costs incurred to create new drugs for a pharmaceutical company. g. The cost of secretarial supplies used in a doctor's office. h. Depreciation on the office furniture of the company president. i. Direct materials used in a manufacturing company. j. Indirect materials used in a manufacturing company. Product Cost Selling, General, and Administrative Cost a. X b. X c. X d. X e. X f. X g. X h. X i. X j. X
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Exercise 1-4A Identifying effect of product versus selling, general, and administrative costs on financial statements LO 3 Required Nailry Corporation recognized accrued compensation cost. Use the following model to show how this event would affect the company's financial statement under the following two assumptions: (1) the compensation is for office personnel (2) the compensation is for production workers. (3) Use pluses or minuses to show the effect on each element. If an element is not affected, indicate so by placing the letters NA under the appropriate heading. Assets = Liab. + Equity Rev. Exp. = Net Inc. 1. NA + NA + 2. + + NA NA NA NA Perio d Perio d Product Product Product Inventor y Perio d Non-cash  Liability
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Exercise 1-8A Recording product versus selling, general, and administrative costs in a financial statements model LO 2, 3 Pappas Manufacturing experienced the following events during its first accounting period. 1. Recognized depreciation on manufacturing equipment. 2. Recognized depreciation on office furniture. 3. Recognized revenue from cash sale of products. 4. Recognized cost of goods sold from sale referenced in Event 3. 5. Acquired cash by issuing common stock. 6. Paid cash to purchase raw materials that were used to make products. 7. Paid wages to production workers. 8. Paid salaries to administrative staff. Assets = Equity Income Statement Event Manuf. Office Com. Ret. No. Cash + Inventory + Equip. + Furn. = Stk. + Ear. Rev. Exp. = Net Inc. 1. NA + I + D + NA = NA NA NA NA = NA 2. NA + NA + NA + D = NA D NA I = D 3. I + NA + NA + NA = NA I I NA = I 4. NA + D + NA + NA = NA D NA I = D 5. I + NA + NA + NA = I + NA NA NA = NA 8. Period 1. Product 2. Period 6. Product 7. Product 3. Revenu e 4. COGS 5. Issue Stock 8. Period 1. Product 2. Period 6. Product 7. Product 3. Revenue 4. COGS 5. Issue Stock
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Demonstration Problem 1-1 Identifying Product Costs Eiffel Manufacturing Company makes small replicas of major landmarks that it sells to souvenir shops. The company was started on January 1, 2010 when it acquired $60,000 cash from the issue of common stock. During 2010 the company purchased and used raw materials that cost $16,000 cash. It paid wages to workers who made the replicas $22,000 cash.
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In-Class Demos - Exercise 1-2A Identifying product versus...

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