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College Accounting, Chapters 1-27 22nd Edition

College Accounting, Chapters 1-27 (22nd Edition)

Book Edition22nd Edition
Author(s)Heintz, Parry
End of Chapter
Self-Study Self-Study Test Questions True/False
Self-Study Self-Study Test Questions Multiple Choice
Self-Study Self-Study Test Questions Checkpoint Exercises
Applying Your Knowledge Series A Problems
Applying Your Knowledge - Series B Problems
Applying Your Knowledge - Managing Your Writing
Applying Your Knowledge Ethics Case
Challenge Problem
Chapter 27, End of Chapter, Self-Study Demonstration Problem, Exercise 1
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Montgomery Manufacturing Co. manufactures and sells a limited line of products per customer order. Nothing is purchased for resale in its original form. The company rents offices and a factory building, and it owns neither real estate nor delivery equipment. It does have its own office and factory equipment. The company uses a perpetual inventory system and keeps its accounts on the calendar year basis. The trial balance of the general ledger as of December 31, 20--, is provided below. Data for the year-end adjustment of the accounts follow the trial balance. Data for year-end adjustments are as follows:
(a)Interest payable$      168
(b)Office supplies expense900
(c)Factory supplies expense1,870
(d)Depreciation of office equipment960
(e)Depreciation of factory equipment22,560
(f)Insurance expense on:
 office equipment$    120
 factory equipment1,5901,710
(g)Provision for bad debt expense (based on percentage of sales)1,000
(h)Provision for corporate income taxes60,560
(i)Factory overhead to be applied to work in process4,729
Physical counts of the inventories agreed with the amounts in the books. Additional information needed to prepare the income statement and schedule of cost of goods manufactured is as follows:
Finished goods inventory, January 1$219,692
Materials inventory, January 123,000
Purchases for the year114,500
Direct labor156,897
Work in process inventory, January 136,500
Indirect materials charged to production4,500
Prepare a 10-column work sheet for the year ended December 31, 20--. After the factory overhead account is adjusted, the total debits will differ from the total credits. Enter the under- or overapplied overhead on the work sheet by transferring it to Cost of Goods Sold. [Label this adjustment (j).]

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