The accounting department at Mansbridge Inc. prepared the following income statement for the quarter ending December 31, 2019. Mc Graw ill Sales Purchases of materials (1) Payroll (2) Advertising Administrative travel Manufacturing utilities. Facility rental (3) Depreciation (4) Sales commissions Annual insurance (25 % for manufacturing) Office utilities Management salaries (5) Net income Notes: (1) 70% of the materials were direct (2) 60% direct labour, 40% indirect labour (3) 90% related to manufacturing (4) 70% related to manufacturing (5) 40% related to manufacturing Direct materials Work in process Finished goods Required: The department also compiled the following information with respect to inventories for the quarter (note that the company does not maintain inventories of indirect materials). Direct materials; Direct materials used Overhead Beginning $ 7,370 1. Prepare a cost of goods manufactured statement for the quarter. Direct materials available for use. Total manufacturing costs Total work-in-process 8,570 11,780 ype here to search $1,422,600 251,140 268,500 38,000 Cost of goods manufactured Ending $8,660 9,920 7,720 Cost of Goods Manufactured Statement For the Quarter Ending December 31, 2019 MANSBRIDGE Inc 65,500 51,000 50,000 23,400 398,000 $ 97,060 28,600 51,400 100,000 $ O Di 0 $ S $ S 0 0 0 0 0 < Prev
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.
Direct Costs :— It is the cost that is directly incurred in the manufacturing of product during the period.
Overhead :— It is the cost that is indirectly incurred in the manufacturing of product during the period.
Total Manufacturing Cost :— It is the sum of direct material, direct labour and manufacturing overhead costs.
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