Exercise 3-6 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income Statement [LO3-3] The following data from the just completed year are taken from the accounting records of Mason Company: $ 655,000 $ 84,000 $ 136,000 106,000 $ 41,000 $ $ 221,000 $ 202,000 Sales Direct labor cost Raw material purchases Selling expenses Administrative expenses Manufacturing overhead applied to work in process Actual manufacturing overhead costs Inventories Raw materials: Work in process Finished goods Beginning $ 8,400 $5,300 $ 73,000 Ending $10,800 $ 20,000 $ 25,900 Required: 1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. 2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of Goods Sold. 3. Prepare an income statement. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials. Mason Company Schedule of Cost of Goods Manufactured
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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![Exercise 3-6 (Algo) Schedules of Cost of Goods Manufactured and Cost of Goods Sold; Income
Statement [LO3-3]
The following data from the just completed year are taken from the accounting records of Mason Company:
$ 655,000
$ 84,000
$ 136,000
$ 106,000
$ 41,000
Sales
Direct labor cost
Raw material purchases
Selling expenses
Administrative expenses
Manufacturing overhead applied to work in process
Actual manufacturing overhead coats
Inventories
Raw materials
Work in process
Finished goods
Beginning
$ 8,400
$5,300
$ 73,000
Ending
$ 10,800
$ 20,000
$ 25,900
$
221,000
$ 202,000
Required:
1. Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.
2. Prepare a schedule of cost of goods sold. Assume that the company's underapplied or overapplied overhead is closed to Cost of
Goods Sold.
3. Prepare an income statement.
Direct materials:
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Prepare a schedule of cost of goods manufactured. Assume all raw materials used in production were direct materials.
Mason Company
Schedule of Cost of Goods Manufactured](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F531d22d6-41e3-4ab6-9b43-fd8dca83c239%2F78f50f20-df5f-47a3-9544-3520965c636c%2F4mdmohi_processed.jpeg&w=3840&q=75)
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