Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $84,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Work in process Finished goods During the year, the following transactions were completed: a. Raw materials purchased on account, $162,000. b. Raw materials used in production, $148,000 (materials costing $126,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor Indirect labor Sales commissions $ 10,400 $ 4,700 $ 8,500 Administrative salaries $ 179,000 $ 292,200 $ 28,000 $ 43,000 d. Rent for the year was $18,200 ($13,600 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $19,000. f. Advertising costs incurred, $11,000. g. Depreciation recorded on equipment, $25,000. ($16,000 of this amount related to equipment used in factory operations; the remaining $9,000 related to equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $?. i. Goods that had cost $228,000 to manufacture according to their job cost sheets were completed. j. Sales for the year (all paid in cash) totaled $511,000. The total cost to manufacture these goods according to their job cost sheets was $219,000.

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Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company
sells its birdcages through an extensive network of street vendors who receive commissions on their sales.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined
overhead rate is based on a cost formula that estimated $84,000 of manufacturing overhead for an estimated activity level of $40,000
direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials.
Work in process.
Finished goods
During the year, the following transactions were completed:
$ 10,400
$ 4,700
$ 8,500
a. Raw materials purchased on account, $162,000.
b. Raw materials used in production, $148,000 (materials costing $126,000 were charged directly to jobs; the remaining materials
were indirect).
c. Costs for employee services were incurred as follows:
Direct labor
Indirect labor.
Sales commissions
Administrative salaries
$ 179,000
$
292,200
e. Utility costs incurred in the factory, $19,000.
f. Advertising costs incurred, $11,000.
$ 28,000
$ 43,000
d. Rent for the year was $18,200 ($13,600 of this amount related to factory operations, and the remainder related to selling and
administrative activities).
g. Depreciation recorded on equipment, $25,000. ($16,000 of this amount related to equipment used in factory operations; the
remaining $9,000 related to equipment used in selling and administrative activities.)
h. Manufacturing overhead cost was applied to jobs, $ ?
i. Goods that had cost $228,000 to manufacture according to their job cost sheets were completed.
j. Sales for the year (all paid in cash) totaled $511,000. The total cost to manufacture these goods according to their job cost sheets
was $219,000.
Transcribed Image Text:Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $84,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials. Work in process. Finished goods During the year, the following transactions were completed: $ 10,400 $ 4,700 $ 8,500 a. Raw materials purchased on account, $162,000. b. Raw materials used in production, $148,000 (materials costing $126,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor Indirect labor. Sales commissions Administrative salaries $ 179,000 $ 292,200 e. Utility costs incurred in the factory, $19,000. f. Advertising costs incurred, $11,000. $ 28,000 $ 43,000 d. Rent for the year was $18,200 ($13,600 of this amount related to factory operations, and the remainder related to selling and administrative activities). g. Depreciation recorded on equipment, $25,000. ($16,000 of this amount related to equipment used in factory operations; the remaining $9,000 related to equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $ ? i. Goods that had cost $228,000 to manufacture according to their job cost sheets were completed. j. Sales for the year (all paid in cash) totaled $511,000. The total cost to manufacture these goods according to their job cost sheets was $219,000.
4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries
and T-accounts you have prepared.
Complete this question by entering your answers in the tabs below.
Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal
entries and T-accounts you have prepared.)
Gold Nest Company
Income Statement
For the Year Ended
Selling and administrative expenses:
< Req 3B
Req 4
$
0
0
0
Req 4 >
Transcribed Image Text:4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared. Complete this question by entering your answers in the tabs below. Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.) Gold Nest Company Income Statement For the Year Ended Selling and administrative expenses: < Req 3B Req 4 $ 0 0 0 Req 4 >
Expert Solution
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An income statement is a financial report that indicates the revenue and expenses of a business. It also indicates when a business is profitable or losing money for a given time span. 

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