Assets Cash Raw materials Work in process Finished goods January 1 $ 32,000 $ 9,000 Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity 4,000 17,000 During January the company completed the following transactions: a. Purchased raw materials on account, $74,000. 30,000 2,000 190,000 $ 254,000 $ 7,000 247,000 $ 254,000 b. Raw materials used in production, $77,000 ($67,000 was direct materials and $10,000 was indirect materials). c. Paid $167,000 of salaries and wages in cash ($95,000 was direct labor, $35,000 was indirect labor, and $37,000 was related to employees responsible for selling and administration). d. Various manufacturing overhead costs incurred (on account) to support production, $33,000. e. Depreciation recorded on property, plant, and equipment, $90,000 (70% related to manufacturing equipment and 30% related to assets that support selling and administration). f. Various selling expenses paid in cash, $27,000. g. Prepaid insurance expired, $1,200 (80% related to production, and 20% related to selling and administration). h. Manufacturing overhead applied to production, $132,000. i. Cost of goods manufactured, $288,000. j. Cash sales to customers, $395,000. k. Cost of goods sold (unadjusted), $285,000. I. Cash payments to creditors, $62,000. n. Underapplied or overapplied overhead $? Required: 1. Calculate the ending balances on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its effect on the balance sheet.) 2. What is Morrison Company's net operating income for January?
Assets Cash Raw materials Work in process Finished goods January 1 $ 32,000 $ 9,000 Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity 4,000 17,000 During January the company completed the following transactions: a. Purchased raw materials on account, $74,000. 30,000 2,000 190,000 $ 254,000 $ 7,000 247,000 $ 254,000 b. Raw materials used in production, $77,000 ($67,000 was direct materials and $10,000 was indirect materials). c. Paid $167,000 of salaries and wages in cash ($95,000 was direct labor, $35,000 was indirect labor, and $37,000 was related to employees responsible for selling and administration). d. Various manufacturing overhead costs incurred (on account) to support production, $33,000. e. Depreciation recorded on property, plant, and equipment, $90,000 (70% related to manufacturing equipment and 30% related to assets that support selling and administration). f. Various selling expenses paid in cash, $27,000. g. Prepaid insurance expired, $1,200 (80% related to production, and 20% related to selling and administration). h. Manufacturing overhead applied to production, $132,000. i. Cost of goods manufactured, $288,000. j. Cash sales to customers, $395,000. k. Cost of goods sold (unadjusted), $285,000. I. Cash payments to creditors, $62,000. n. Underapplied or overapplied overhead $? Required: 1. Calculate the ending balances on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its effect on the balance sheet.) 2. What is Morrison Company's net operating income for January?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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Transcribed Image Text:Assets
Cash
Raw materials
Work in process
Finished goods
January 1
$ 32,000
$ 9,000
Prepaid expenses
Property, plant, and equipment (net)
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Retained earnings
Total liabilities and stockholders' equity
4,000
17,000
During January the company completed the following transactions:
a. Purchased raw materials on account, $74,000.
30,000
2,000
190,000
$ 254,000
$ 7,000
247,000
$ 254,000
b. Raw materials used in production, $77,000 ($67,000 was direct materials and $10,000 was indirect materials).
c. Paid $167,000 of salaries and wages in cash ($95,000 was direct labor, $35,000 was indirect labor, and $37,000 was related to
employees responsible for selling and administration).
d. Various manufacturing overhead costs incurred (on account) to support production, $33,000.
e. Depreciation recorded on property, plant, and equipment, $90,000 (70% related to manufacturing equipment and 30% related to
assets that support selling and administration).
f. Various selling expenses paid in cash, $27,000.
g. Prepaid insurance expired, $1,200 (80% related to production, and 20% related to selling and administration).
h. Manufacturing overhead applied to production, $132,000.
i. Cost of goods manufactured, $288,000.
j. Cash sales to customers, $395,000.
k. Cost of goods sold (unadjusted), $285,000.
I. Cash payments to creditors, $62,000.
n. Underapplied or overapplied overhead $?
Required:
1. Calculate the ending balances on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplied or
overapplied overhead and then account for its effect on the balance sheet.)
2. What is Morrison Company's net operating income for January?
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