Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. (Select "Yes" or "No" from the below dropdowns.) Product Cost Period Cost Cost Eggs used to Delivery Depreciation of office camputers ovens President's salary salary Direct Materials Direct Labor Factory Overhead Selling Expense Administrative Expense Direct Cost Indirect Cost Prime Cost Conversion Cost Financial Statements Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B, and balance sheets Cand D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company Income Statement A
Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. (Select "Yes" or "No" from the below dropdowns.) Product Cost Period Cost Cost Eggs used to Delivery Depreciation of office camputers ovens President's salary salary Direct Materials Direct Labor Factory Overhead Selling Expense Administrative Expense Direct Cost Indirect Cost Prime Cost Conversion Cost Financial Statements Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B, and balance sheets Cand D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company Income Statement A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Sample Company A
Income Statement
For the Year Ended December 31, 2018
Sales
Finished goods inventory, January 1, 2018
Cost of goods manufactured
Cost of finished goods available for sale
Finished goods inventory, December 31, 2018 (400)
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
Total operating expenses
Net income
Income Statement B
Sample Company B
Income Statement
For the Year Ended December 31, 2018
Sales
$42,000
Beginning inventory
Net purchases
Inventory available for sale $11,650
Ending inventory
(400)
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
Total operating expenses
Net income
Balance Sheet C
Cash
Accounts receivable (net)
Inventory
Supplies
Land
Total assets
$5,250
6,400
Accounts payable
$6,400
5,250
Sample Company C
Balance Sheet
December 31, 2018
Assets
Liabilities
(11,250)
$30,750
(11,650)
$19,100
$5,250
6,400
$11,650
Stockholders' Equity
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Balance Sheet D
$6,400
5,250
$20,800
10,000
6,000
2,100
17,000
$55,900
$17,800
$19,000
19,100
38,100
$55,900
$42,000
(11,250)
$30,750
(11,650)
$19,100](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3717f9df-8e3e-4fb1-bc0e-e458f495caa3%2F8cbe4baf-72fe-41de-abe9-67650c5f1b3f%2Fnw8iqv7k_processed.png&w=3840&q=75)
Transcribed Image Text:Sample Company A
Income Statement
For the Year Ended December 31, 2018
Sales
Finished goods inventory, January 1, 2018
Cost of goods manufactured
Cost of finished goods available for sale
Finished goods inventory, December 31, 2018 (400)
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
Total operating expenses
Net income
Income Statement B
Sample Company B
Income Statement
For the Year Ended December 31, 2018
Sales
$42,000
Beginning inventory
Net purchases
Inventory available for sale $11,650
Ending inventory
(400)
Cost of goods sold
Gross profit
Operating expenses:
Selling expenses
Administrative expenses
Total operating expenses
Net income
Balance Sheet C
Cash
Accounts receivable (net)
Inventory
Supplies
Land
Total assets
$5,250
6,400
Accounts payable
$6,400
5,250
Sample Company C
Balance Sheet
December 31, 2018
Assets
Liabilities
(11,250)
$30,750
(11,650)
$19,100
$5,250
6,400
$11,650
Stockholders' Equity
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Balance Sheet D
$6,400
5,250
$20,800
10,000
6,000
2,100
17,000
$55,900
$17,800
$19,000
19,100
38,100
$55,900
$42,000
(11,250)
$30,750
(11,650)
$19,100
![Mastery Problem: Introduction to Managerial Accounting
Able Baker Charlie Company
Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about
the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He's also wondering how to set up
his inventory, how to classify the costs of his business, and how to fill in some missing information.
Managerial vs. Financial
Select whether the following characteristics are most often associated with managerial accounting or financial accounting.
Primarily used for internal decision making
Generally Accepted Accounting Principles (GAAP) must be used
Prepared statements usually pertain to the company as a whole rather than individual departments or products
Information provided will often be subjective, such as estimated future results
Often prepared on an as-needed basis rather than at fixed intervals
Cost Classification
Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake.
(Select "Yes" or "No" from the below dropdowns.)
Product
Cost
Period
Cost
Cost
Eggs used to
make
cheesecakes
Baker's
wages
Delivery
driver wages
Depreciation
of office
computers
Power to run
cheesecake
ovens
President's
salary
Sales
commissions
Factory
supervisor
salary
Direct
Materials
Direct
Labor
Factory
Overhead
Selling
Expense
Administrative
Expense
Direct
Cost
Indirect
Cost
Prime
Cost
Conversion
Cost
Financial Statements
Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B, and balance sheets Cand
D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company.
Income Statement A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3717f9df-8e3e-4fb1-bc0e-e458f495caa3%2F8cbe4baf-72fe-41de-abe9-67650c5f1b3f%2Fsbgq59_processed.png&w=3840&q=75)
Transcribed Image Text:Mastery Problem: Introduction to Managerial Accounting
Able Baker Charlie Company
Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about
the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He's also wondering how to set up
his inventory, how to classify the costs of his business, and how to fill in some missing information.
Managerial vs. Financial
Select whether the following characteristics are most often associated with managerial accounting or financial accounting.
Primarily used for internal decision making
Generally Accepted Accounting Principles (GAAP) must be used
Prepared statements usually pertain to the company as a whole rather than individual departments or products
Information provided will often be subjective, such as estimated future results
Often prepared on an as-needed basis rather than at fixed intervals
Cost Classification
Charles has provided some of the costs he expects to incur as follows. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake.
(Select "Yes" or "No" from the below dropdowns.)
Product
Cost
Period
Cost
Cost
Eggs used to
make
cheesecakes
Baker's
wages
Delivery
driver wages
Depreciation
of office
computers
Power to run
cheesecake
ovens
President's
salary
Sales
commissions
Factory
supervisor
salary
Direct
Materials
Direct
Labor
Factory
Overhead
Selling
Expense
Administrative
Expense
Direct
Cost
Indirect
Cost
Prime
Cost
Conversion
Cost
Financial Statements
Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B, and balance sheets Cand
D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company.
Income Statement A
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