Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in year 1. (Round "Average cost per unit" to 2 decimal places.) b. Determine the amount of cost of goods sold that would appear on the year 1 income statement. (Do not round intermediate calculations.) c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. (Do not round intermediate calculations.) d Determine the amount of net income that wOuld appear on the vear 1 income statement

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
a. Total product cost
Average cost per unit
b. Cost of good sold
$
49,000
c. Ending inventory
d. Net income
e. Retained earning
f. Total assets
%24
Transcribed Image Text:a. Total product cost Average cost per unit b. Cost of good sold $ 49,000 c. Ending inventory d. Net income e. Retained earning f. Total assets %24
Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart
immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture
had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected
useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production
personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and
completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1.
(Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)
Required
a. Determine the total product cost and the average cost per unit of the inventory produced in year 1. (Round "Average cost per unit"
to 2 decimal places.)
b. Determine the amount of cost of goods sold that would appear on the year 1 income statement. (Do not round intermediate
calculations.)
c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. (Do not round
intermediate calculations.)
d. Determine the amount of net income that would appear on the year 1 income statement.
e. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet.
f. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet.
Transcribed Image Text:Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in year 1. (Round "Average cost per unit" to 2 decimal places.) b. Determine the amount of cost of goods sold that would appear on the year 1 income statement. (Do not round intermediate calculations.) c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. (Do not round intermediate calculations.) d. Determine the amount of net income that would appear on the year 1 income statement. e. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet. f. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education