Evelyn Carter started Carter Manufacturing Company to make a universal television remote control device that she had invented. The company's labor force consisted of part-time employees. The following accounting events affected Carter Manufacturing Company during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated.) Transactions for January Year 1, First Month of Operation 1. Issued common stock for $3,000. 2. Purchased $210 of direct raw materials and $30 of production supplies. 3. Used $120 of direct raw materials. 4. Used 80 direct labor hours; production workers were paid $4.80 per hour. 5. Expected total overhead costs for the year to be $1,650 and direct labor hours used during the year to be 1,000. Calculate an overhead rate and apply the appropriate amount of overhead costs to Work in Process Inventory. 6. Paid $72 for salaries to administrative and sales staff. 7. Paid $12 for indirect manufacturing labor. 8. Paid $105 for rent and utilities on the manufacturing facilities. 9. Started and completed 100 remote controls during the month; all costs were transferred from the Work in Process Inventory account to the Finished Goods Inventory account. 10. Sold 75 remote controls at a price of $10.80 each. Transactions for Remainder of Year 1 11. Acquired an additional $9,000 by issuing common stock. 12. Purchased $1,950 of direct raw materials and $450 of production supplies. 13. Used $1,500 of direct raw materials. 14. Paid production workers $4.80 per hour for 900 hours of work. 15. Applied the appropriate overhead cost to Work in Process Inventory. 16. Paid $780 for salaries of administrative and sales staff. 17. Paid $120 of indirect manufacturing labor cost. 18. Paid $1,200 for rental and utility costs on the manufacturing facilities. 19. Transferred 950 additional remote controls that cost $6.36 each from the Work in Process Inventory account to the Finished Goods Inventory account. 20. Determined that $84 of production supplies was on hand at the end of the accounting period. 21. Sold 850 remote controls for $10.80 each. 22. Determine whether the overhead is over- or underapplied. Close the Manufacturing Overhead account to the Cost of Goods Sold account. 23. Close the revenue and expense accounts. Required a. For each of the above transactions, post the effects to the appropriate T-accounts. b. 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
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Evelyn Carter started Carter Manufacturing Company to make a universal television remote control device that she had invented. The
company's labor force consisted of part-time employees. The following accounting events affected Carter Manufacturing Company
during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated.)
Transactions for January Year 1, First Month of Operation
1. Issued common stock for $3,000.
2. Purchased $210 of direct raw materials and $30 of production supplies.
3. Used $120 of direct raw materials.
4. Used 80 direct labor hours; production workers were paid $4.80 per hour.
5. Expected total overhead costs for the year to be $1,650 and direct labor hours used during the year to be 1,000. Calculate an
overhead rate and apply the appropriate amount of overhead costs to Work in Process Inventory.
6. Paid $72 for salaries to administrative and sales staff.
7. Paid $12 for indirect manufacturing labor.
8. Paid $105 for rent and utilities on the manufacturing facilities.
9. Started and completed 100 remote controls during the month; all costs were transferred from the Work in Process Inventory
account to the Finished Goods Inventory account.
10. Sold 75 remote controls at a price of $10.80 each.
Transactions for Remainder of Year 1
11. Acquired an additional $9,000 by issuing common stock.
12. Purchased $1,950 of direct raw materials and $450 of production supplies.
13. Used $1,500 of direct raw materials.
14. Paid production workers $4.80 per hour for 900 hours of work.
15. Applied the appropriate overhead cost to Work in Process Inventory.
16. Paid $780 for salaries of administrative and sales staff.
17. Paid $120 of indirect manufacturing labor cost.
18. Paid $1,200 for rental and utility costs on the manufacturing facilities.
19. Transferred 950 additional remote controls that cost $6.36 each from the Work in Process Inventory account to the Finished
Goods Inventory account.
20. Determined that $84 of production supplies was on hand at the end of the accounting period.
21. Sold 850 remote controls for $10.80 each.
22. Determine whether the overhead is over- or underapplied. Close the Manufacturing Overhead account to the Cost of Goods Sold
account.
23. Close the revenue and expense accounts.
Required
a. For each of the above transactions, post the effects to the appropriate T-accounts.
b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.
Transcribed Image Text:Evelyn Carter started Carter Manufacturing Company to make a universal television remote control device that she had invented. The company's labor force consisted of part-time employees. The following accounting events affected Carter Manufacturing Company during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated.) Transactions for January Year 1, First Month of Operation 1. Issued common stock for $3,000. 2. Purchased $210 of direct raw materials and $30 of production supplies. 3. Used $120 of direct raw materials. 4. Used 80 direct labor hours; production workers were paid $4.80 per hour. 5. Expected total overhead costs for the year to be $1,650 and direct labor hours used during the year to be 1,000. Calculate an overhead rate and apply the appropriate amount of overhead costs to Work in Process Inventory. 6. Paid $72 for salaries to administrative and sales staff. 7. Paid $12 for indirect manufacturing labor. 8. Paid $105 for rent and utilities on the manufacturing facilities. 9. Started and completed 100 remote controls during the month; all costs were transferred from the Work in Process Inventory account to the Finished Goods Inventory account. 10. Sold 75 remote controls at a price of $10.80 each. Transactions for Remainder of Year 1 11. Acquired an additional $9,000 by issuing common stock. 12. Purchased $1,950 of direct raw materials and $450 of production supplies. 13. Used $1,500 of direct raw materials. 14. Paid production workers $4.80 per hour for 900 hours of work. 15. Applied the appropriate overhead cost to Work in Process Inventory. 16. Paid $780 for salaries of administrative and sales staff. 17. Paid $120 of indirect manufacturing labor cost. 18. Paid $1,200 for rental and utility costs on the manufacturing facilities. 19. Transferred 950 additional remote controls that cost $6.36 each from the Work in Process Inventory account to the Finished Goods Inventory account. 20. Determined that $84 of production supplies was on hand at the end of the accounting period. 21. Sold 850 remote controls for $10.80 each. 22. Determine whether the overhead is over- or underapplied. Close the Manufacturing Overhead account to the Cost of Goods Sold account. 23. Close the revenue and expense accounts. Required a. For each of the above transactions, post the effects to the appropriate T-accounts. b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.
Reg B Bal
Sheet
Req B CGM
Req B Inc
Reg A
Sched
Stmt
For each of the above transactions, post the effects to the appropriate T-accounts. (Do not round intermediate calculations.)
Cash
Common Stock
1.
2.
3.
4.
End. Bal,
5.
6.
7.
8.
9.
10.
11.
End. Bal.
Raw Materials
Retained Earnings
12.
13.
14.
End. Bal.
End. Bal.
Manufacturing Overhead
Sales Revenue
15.
16.
(x
17.
18.
End. Bal,
19.
(x
20.
End. Bal.
Work in Process
Cost of Goods Sold
End. Bal.
End. Bal.
Finished Goods
Selling and Administrative Expenses
End. Bal.
End. Bal.
Production Supplies
Transcribed Image Text:Reg B Bal Sheet Req B CGM Req B Inc Reg A Sched Stmt For each of the above transactions, post the effects to the appropriate T-accounts. (Do not round intermediate calculations.) Cash Common Stock 1. 2. 3. 4. End. Bal, 5. 6. 7. 8. 9. 10. 11. End. Bal. Raw Materials Retained Earnings 12. 13. 14. End. Bal. End. Bal. Manufacturing Overhead Sales Revenue 15. 16. (x 17. 18. End. Bal, 19. (x 20. End. Bal. Work in Process Cost of Goods Sold End. Bal. End. Bal. Finished Goods Selling and Administrative Expenses End. Bal. End. Bal. Production Supplies
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I keep getting retained earnings wrong. Can someone help?

 

The image depicts two tables related to accounting entries, specifically for "Raw Materials" and "Retained Earnings."

### Raw Materials
- **Beginning Balance**:
  - Not explicitly indicated before transactional entries.
  
- **Transactions**:
  - Entry 2: 210 (marked correctly)
  - Entry 3: 120 (marked correctly)
  - Entry 12: 1,950 (marked correctly)
  
- **End Balance**:
  - Total: 2,040
  - Errors: None indicated

### Retained Earnings
- **Beginning Balance**:
  - Not explicitly indicated before transactional entries.

- **Transactions**:
  - Entry 23: 7,023 (marked as incorrect)
  - Entry 23: 9,990 (marked as incorrect)
  - Entry 23:  (no amount specified - marked as correct)

- **End Balance**:
  - Total: 2,967
  - Errors: Two entries marked as incorrect

### Symbols
- **Green Checkmark**: Correct entry or balance
- **Red Cross**: Incorrect entry or balance

This structure illustrates the use of ledger accounts to record transactions and monitor balances for raw materials and retained earnings, pointing out correct and incorrect entries for educational clarification.
Transcribed Image Text:The image depicts two tables related to accounting entries, specifically for "Raw Materials" and "Retained Earnings." ### Raw Materials - **Beginning Balance**: - Not explicitly indicated before transactional entries. - **Transactions**: - Entry 2: 210 (marked correctly) - Entry 3: 120 (marked correctly) - Entry 12: 1,950 (marked correctly) - **End Balance**: - Total: 2,040 - Errors: None indicated ### Retained Earnings - **Beginning Balance**: - Not explicitly indicated before transactional entries. - **Transactions**: - Entry 23: 7,023 (marked as incorrect) - Entry 23: 9,990 (marked as incorrect) - Entry 23: (no amount specified - marked as correct) - **End Balance**: - Total: 2,967 - Errors: Two entries marked as incorrect ### Symbols - **Green Checkmark**: Correct entry or balance - **Red Cross**: Incorrect entry or balance This structure illustrates the use of ledger accounts to record transactions and monitor balances for raw materials and retained earnings, pointing out correct and incorrect entries for educational clarification.
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