Morrow Inc. has the following information for the current year: Opening inventory (units) 600 Production (units) 7,800 Ending inventory (units) 900 Sales price (per unit) $310.00 The company's accounting records provide the following information for the year: Description Amount ($) Customer service dept. Costs 102,300 Administrative costs, head office 107,000 Maintenance manager salary (factory) 88,400 Factory insurance 34,900 Depreciation (head office) 165,100 Salary, president 160,400 Direct Labour 267,400 Depreciation (factory) 213,900 Raw material purchases 428,400 Indirect materials 88,400 Indirect labour 109,300 Factory utilities 55,800 Opening WIP Inventory 4,700 Closing WIP Inventory 9,000 Opening raw materials inventory 9,900 Closing raw materials inventory 8,200 Opening Finished Goods Inventory 16,300 Closing Finished Goods Inventory 21,900 Using the above information, develop a Schedule of Cost of Goods Manufactured, Schedule of Cost of Goods Sold, and an Income Statement. Use the information to answer the following questions. What is the total Direct Materials Used from the Schedule of Cost of Goods Manufactured? What is the total Direct Labour from the Schedule of Cost of Goods Manufactured? What is the total Manufacturing Overhead costs from the Schedule of Cost of Goods Manufactured? What is the total Cost of Goods Manufactured from the Schedule of Cost of Goods Manufactured? What is the total Cost of Goods Sold from the Cost of Goods Sold Statement? What is the total Operating Income, also called Income before Income Taxes, from the Income Statement?
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.
Morrow Inc. has the following information for the current year:
| Opening inventory (units) | 600 |
| Production (units) | 7,800 |
| Ending inventory (units) | 900 |
| Sales price (per unit) | $310.00 |
The company's accounting records provide the following information for the year:
| Description | Amount ($) |
| Customer service dept. Costs | 102,300 |
| Administrative costs, head office | 107,000 |
| Maintenance manager salary (factory) | 88,400 |
| Factory insurance | 34,900 |
| 165,100 | |
| Salary, president | 160,400 |
| Direct Labour | 267,400 |
| Depreciation (factory) | 213,900 |
| Raw material purchases | 428,400 |
| Indirect materials | 88,400 |
| Indirect labour | 109,300 |
| Factory utilities | 55,800 |
| Opening WIP Inventory | 4,700 |
| Closing WIP Inventory | 9,000 |
| Opening raw materials inventory | 9,900 |
| Closing raw materials inventory | 8,200 |
| Opening Finished Goods Inventory | 16,300 |
| Closing Finished Goods Inventory | 21,900 |
Using the above information, develop a Schedule of Cost of Goods Manufactured, Schedule of Cost of Goods Sold, and an Income Statement. Use the information to answer the following questions.
What is the total Direct Materials Used from the Schedule of Cost of Goods Manufactured?
What is the total Direct Labour from the Schedule of Cost of Goods Manufactured?
What is the total
What is the total Cost of Goods Manufactured from the Schedule of Cost of Goods Manufactured?
What is the total Cost of Goods Sold from the Cost of Goods Sold Statement?
What is the total Operating Income, also called Income before Income Taxes, from the Income Statement?
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