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Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $815,000 of work in process to finished goods.

Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $815,000 of work in process to finished goods.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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EX 2-14 Financial statements of a manufacturing firm Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: EXCEL TEMPLATE • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. Transferred $815,000 of work in process to finished goods. • Sold goods with a cost of $789,000. • old goods for $1,400,000. • Incurred $316,000 of selling expenses. • Incurred $125,000 of administrative expenses. A. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Answer B. Determine the inventory balances at the end of the first month of operations.
Transcribed Image Text:EX 2-14 Financial statements of a manufacturing firm Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: EXCEL TEMPLATE • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. Transferred $815,000 of work in process to finished goods. • Sold goods with a cost of $789,000. • old goods for $1,400,000. • Incurred $316,000 of selling expenses. • Incurred $125,000 of administrative expenses. A. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Answer B. Determine the inventory balances at the end of the first month of operations.
Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. А. Chi-Lite Inc. Income Statement For the Month Ended June 30 Revenues Gross profit Selling and administrative expenses: Total selling and administrative expenses Income from operations В. Materials inventory: Purchased materials Less: Materials used in production Materials inventory, June 30 Work in process inventory: Materials used in production Direct labor Factory overhead Additions to work in process Less: Transferred to finished goods Work in process inventory, June 30 Finished goods inventory: Transferred to finished goods Less: Cost of goods sold Finished goods inventory, June 30
Transcribed Image Text:Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. А. Chi-Lite Inc. Income Statement For the Month Ended June 30 Revenues Gross profit Selling and administrative expenses: Total selling and administrative expenses Income from operations В. Materials inventory: Purchased materials Less: Materials used in production Materials inventory, June 30 Work in process inventory: Materials used in production Direct labor Factory overhead Additions to work in process Less: Transferred to finished goods Work in process inventory, June 30 Finished goods inventory: Transferred to finished goods Less: Cost of goods sold Finished goods inventory, June 30
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