Eminence Corporation makes rocking chairs. The chairs move through two departments during production. Lumber iscut into chair parts in the cutting department, which transfers the parts to the assembly department for completion. Thecompany sells the unfinished chairs to hobby shops. The following transactions apply to Eminence's operations for itsfirst year, Year 1. (Assume that all transactions are for cash unless otherwise stated.)1. The company was started when it acquired a $47,000 cash contribution from the owners.2. The company purchased $15,000 of direct raw materials and $400 of indirect materials. Indirect materials arecapitalized in the Production Supplies account.3. Direct materials totaling $7,000 were issued to the cutting department.4. Labor cost was $28,200. Direct labor for the cutting and assembly departments was $10,000 and $13,000,respectively. Indirect labor costs were $5,200.5. The predetermined overhead rate was $0.50 per direct labor dollar in each department.6. Actual overhead costs other than indirect materials and indirect labor were $6,400 for the year.7. The cutting department transferred $12,500 of inventory to the assembly department.8. The assembly department transferred $20,500 of inventory to finished goods.9. The company sold inventory costing $18,500 for $30,000.10. Selling and administrative expenses were $3,000.11. A physical count revealed $100 of production supplies on hand at the end of Year 1.12. Assume that over- or underapplied overhead is insignificant.Requireda. Record the data in T-accounts.b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant.c. Close the revenue and expense accounts.d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.Complete this question by entering your answers in the tabs below.Req A toсEnd. bal.Record the data in T-accounts. Record the closing entry for over- or underapplied manufacturing overhead,assuming that the amount is insignificant. Close the revenue and expense accounts. (The cash expenditures inevent No. 2 should be recorded as separate amounts in the Cash account. The closing entry for revenue andexpenses should be made in one entry.)End. bal.End. bal.Reg DCGMEnd. bal.Req D Inc Req D BalStmt SheetCashRaw MaterialsManufacturing OverheadWork in process CuttingWork in process AssemblyEnd. bal.End. bal.CIEnd. bal.End. bal.Common StockRetained EarningsRevenueCost of Goods SoldCICISelling & Administrative ExpensesShow less

Name: Eminence Corporation makes rocking chairs. The chairs move through tw
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Description: Eminence Corporation makes rocking chairs. The chairs move through two departments during production. Lumber iscut into chair parts in the cutting department, which transfers the parts to the assembly department for completion. Thecompany sells the

Here asked for multi sub part question we will solve for first three sub part question for you. If you need additional kindly resubmit the question with mention the requirement details T-Account A collection of financial documents that employ double-entry accounting is referred to informally as a T-account. The phrase defines how the accounting records occur. On a page, a huge letter T is first drawn. The account name is then written directly above the top straight axis, and below that, split by the vertical T of the letter, debits are reported on the left and reimbursements are noted on the right. A) Cash Debit ($) Credit ($) Capital A/c 47000 15000 Raw Material Inventory Sales 30000 400 Indirect Material 28200 Labor Charges 6400 Manufacturing Overhead 3000 S&A Expenses 24000 Ending Balance 77000 77000 Capital A/c Debit ($) Credit ($) 47000 Cash Raw Material Inventory Debit ($) Credit ($) Cash 15000 7000 WIP - Cutting 8000 Ending Balance 15000 15000 Production Supplies Debit ($) Credit ($) Cash 400 300 Manufacturing Overhead 100 Ending Balance 400 400 Work in Process - Cutting Department Debit ($) Credit ($) Raw Material Inventoy 7000 12500 WIP - Assembly Direct Labor Costs 10000 Overhead Applied 5000 9500 Ending Balance 22000 22000 Work in Process - Assembly Department Debit ($) Credit ($) WIP - Cutting 12500 20500 Finished goods Direct Labor 13000 Overhead Applied 6500 11500 Ending Balance 32000 32000 Manufacturing Overhead Debit ($) Credit ($) Indirect Labor 5200 5000 WIP Cutting Cash 6400 6500 WIP Assembly Production Supply 300 400 COGS 11900 11900 Finished Goods Inventory Debit ($) Credit ($) WIP Assembly 20500 18500 COGS 2000 Ending Balance 20500 20500 Cost of Goods Sold Debit ($) Credit ($) Finished goods 18500 Manufacturing Overhead 400 Balance 18900 Sales Debit ($) Credit ($) 30000 Cash Selling and Administrative Expenses Debit ($) Credit ($) Cash 3000 b) Closing entries for Under applied Manufacturing Overhead Closing Journal Entries Event Account Title and Explanation Debit ($) Credit ($) B Cost of Goods Sold 400 To Manufacturing Ovehread 400 (Being recorded the under applied of overhead transferred to COSG) Working Note Manufacturing Overhead Debit ($) Credit ($) Indirect Labor 5200 5000 WIP Cutting Cash 6400 6500 WIP Assembly Production Supply 300 400 COGS 11900 11900 c) Closing Journal Entries Event Account Title and Explanation Debit ($) Credit ($) C Sales 30000 To Income Summary 30000 (Being record the closing entry of revenue account) C Income Summary 21900 To Cost of goods sold 18900 To S&A Expenses 3000 (being record of closing of expenses account) C Income Summary 8100 To Retained Earnings 8100 (Being record of balance transferred to R/E) T-Account Cash Debit ($) Credit ($) Capital A/c 47000 15000 Raw Material Inventory Sales 30000 400 Indirect Material 28200 Labor Charges 6400 Manufacturing Overhead 3000 S&A Expenses 24000 Ending Balance 77000 77000 Capital A/c Debit ($) Credit ($) 47000 Cash Raw Material Inventory Debit ($) Credit ($) Cash 15000 7000 WIP - Cutting 8000 Ending Balance 15000 15000 Production Supplies Debit ($) Credit ($) Cash 400 300 Manufacturing Overhead 100 Ending Balance 400 400 Work in Process - Cutting Department Debit ($) Credit ($) Raw Material Inventoy 7000 12500 WIP - Assembly Direct Labor Costs 10000 Overhead Applied 5000 9500 Ending Balance 22000 22000 Work in Process - Assembly Department Debit ($) Credit ($) WIP - Cutting 12500 20500 Finished goods Direct Labor 13000 Overhead Applied 6500 11500 Ending Balance 32000 32000 Manufacturing Overhead Debit ($) Credit ($) Indirect Labor 5200 5000 WIP Cutting Cash 6400 6500 WIP Assembly Production Supply 300 400 COGS 11900 11900 Finished Goods Inventory Debit ($) Credit ($) WIP Assembly 20500 18500 COGS 2000 Ending Balance 20500 20500 Cost of Goods Sold Debit ($) Credit ($) Finished goods 18500 18900 Income Summary Manufacturing Ovehead 400 Balance 18900 18900 Sales Debit ($) Credit ($) Income Summary 30000 30000 Cash Selling and Administrative Expenses Debit ($) Credit ($) Cash 3000 3000 Income Summary Income Summary Debit ($) Credit ($) COGS 18900 30000 Sales S&A Expenses 3000 Retained Earnings 8100 Balance 30000 30000 Retained Earnings Debit ($) Credit ($) 8100 Income Summary

Business

Accounting

a. Record the data in T-accounts. b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant. c. Close the revenue and expense accounts. d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.

a. Record the data in T-accounts. b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant. c. Close the revenue and expense accounts. d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.

Topic Video

Question

Eminence Corporation makes rocking chairs. The chairs move through two departments during production. Lumber is
cut into chair parts in the cutting department, which transfers the parts to the assembly department for completion. The
company sells the unfinished chairs to hobby shops. The following transactions apply to Eminence's operations for its
first year, Year 1. (Assume that all transactions are for cash unless otherwise stated.)
1. The company was started when it acquired a $47,000 cash contribution from the owners.
2. The company purchased $15,000 of direct raw materials and $400 of indirect materials. Indirect materials are
capitalized in the Production Supplies account.
3. Direct materials totaling $7,000 were issued to the cutting department.
4. Labor cost was $28,200. Direct labor for the cutting and assembly departments was $10,000 and $13,000,
respectively. Indirect labor costs were $5,200.
5. The predetermined overhead rate was $0.50 per direct labor dollar in each department.
6. Actual overhead costs other than indirect materials and indirect labor were $6,400 for the year.
7. The cutting department transferred $12,500 of inventory to the assembly department.
8. The assembly department transferred $20,500 of inventory to finished goods.
9. The company sold inventory costing $18,500 for $30,000.
10. Selling and administrative expenses were $3,000.
11. A physical count revealed $100 of production supplies on hand at the end of Year 1.
12. Assume that over- or underapplied overhead is insignificant.
Required
a. Record the data in T-accounts.
b. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant.
c. Close the revenue and expense accounts.
d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.
Complete this question by entering your answers in the tabs below.
Req A to
с
End. bal.
Record the data in T-accounts. Record the closing entry for over- or underapplied manufacturing overhead,
assuming that the amount is insignificant. Close the revenue and expense accounts. (The cash expenditures in
event No. 2 should be recorded as separate amounts in the Cash account. The closing entry for revenue and
expenses should be made in one entry.)
End. bal.
End. bal.
Reg D
CGM
End. bal.
Req D Inc Req D Bal
Stmt Sheet
Cash
Raw Materials
Manufacturing Overhead
Work in process Cutting
Work in process Assembly
End. bal.
End. bal.
CI
End. bal.
End. bal.
Common Stock
Retained Earnings
Revenue
Cost of Goods Sold
CI
CI
Selling & Administrative Expenses
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