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Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Invent and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit $ 170,000 75,000 80,000 0 15,000 3,000 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: Credit $ 17,000 25,000 50,000 271,000 373,000 218,000 115,000 60,000 $ 736,000 $ 736,000 These six documents must be processed to bring the accounting records up to date. $ 10,200 direct materials to Job 402 $ 18,600 direct materials to Job 404 $ 5,600 indirect materials $36,000 direct labor to Job 402 $ 23,800 direct labor to Job 404 $ 8,200 indirect labor

Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Invent and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit $ 170,000 75,000 80,000 0 15,000 3,000 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: Credit $ 17,000 25,000 50,000 271,000 373,000 218,000 115,000 60,000 $ 736,000 $ 736,000 These six documents must be processed to bring the accounting records up to date. $ 10,200 direct materials to Job 402 $ 18,600 direct materials to Job 404 $ 5,600 indirect materials $36,000 direct labor to Job 402 $ 23,800 direct labor to Job 404 $ 8,200 indirect labor

FINANCIAL ACCOUNTING
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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[The following information applies to the questions displayed below.] Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit $ 170,000 75,000 80,000 0 15,000 3,000 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: Credit $ 17,000 25,000 50,000 271,000 373,000 218,000 115,000 60,000 $ 736,000 $ 736,000 These six documents must be processed to bring the accounting records up to date. $ 10,200 direct materials to Job 402 $ 18,600 direct materials to Job 404 $ 5,600 indirect materials $36,000 direct labor to Job 402 $ 23,800 direct labor to Job 404 $ 8,200 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 200% of direct labor cost.
Transcribed Image Text:[The following information applies to the questions displayed below.] Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit $ 170,000 75,000 80,000 0 15,000 3,000 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: Credit $ 17,000 25,000 50,000 271,000 373,000 218,000 115,000 60,000 $ 736,000 $ 736,000 These six documents must be processed to bring the accounting records up to date. $ 10,200 direct materials to Job 402 $ 18,600 direct materials to Job 404 $ 5,600 indirect materials $36,000 direct labor to Job 402 $ 23,800 direct labor to Job 404 $ 8,200 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 200% of direct labor cost.
4. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $356,800 at the end of the current year. Complete this question by entering your answers in the tabs below. Income Statement Prepare an income statement. Balance Sheet BERGO BAY COMPANY Income Statement For Year Ended December 31
Transcribed Image Text:4. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $356,800 at the end of the current year. Complete this question by entering your answers in the tabs below. Income Statement Prepare an income statement. Balance Sheet BERGO BAY COMPANY Income Statement For Year Ended December 31
Expert Solution
Step 1 Introduction

Factory overhead 

It is the costs incurred during the manufacturing process and it is not including the costs of direct labor and direct materials. It includes the cost of utilities that are required to run a factory such as water, electricity, gas and etc.

Direct materials

Those are components that go into a manufactured product. 

Indirect materials

Those are goods that, while part of overall manufacturing process and that are not integrated into the final product. 

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