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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 Invente and the accrued factory payroll (Factory Wages Payable) has not been recorded. Credit 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) Saler Debit $ 170,000 75,000 80,000 0 15,000 3,000 $ 17,000 25,000 50,000 271,000

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 Invente and the accrued factory payroll (Factory Wages Payable) has not been recorded. Credit 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) Saler Debit $ 170,000 75,000 80,000 0 15,000 3,000 $ 17,000 25,000 50,000 271,000

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. Credit 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 3,000 218,000 115,000 60,000 $ 736,000 $ 17,000 25,000 50,000 271,000 373,000 $ 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 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: $ 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. Credit 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 3,000 218,000 115,000 60,000 $ 736,000 $ 17,000 25,000 50,000 271,000 373,000 $ 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 Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: $ 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.
3. Prepare a revised list of account balances as of December 31. Hint: Use the prior year's Retained Earnings balance of $271,000 in this list. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable BERGO BAY COMPANY List of Account Balances December 31 Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals $ $ Dubit 170,000 75,000 45,600 15,000 3,000 Credit 17,000 25,000 50,000 271,000 373,000 60,000 368,600 $ 736,000
Transcribed Image Text:3. Prepare a revised list of account balances as of December 31. Hint: Use the prior year's Retained Earnings balance of $271,000 in this list. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable BERGO BAY COMPANY List of Account Balances December 31 Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals $ $ Dubit 170,000 75,000 45,600 15,000 3,000 Credit 17,000 25,000 50,000 271,000 373,000 60,000 368,600 $ 736,000
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