Two friends create a company called Dream at the beginning of 2017. They each contributes with 20 000€ to the capital of the company. They paid for equipment costing 10 000 €. This equipment is depreciated using the unit-of-production method, with no salvage value. The equipment is used for manufacturing purposes only. The useful life of this equipment is measured in units, it will reach the end of its useful life when it reaches 1000 manufactured units. They also purchase an initial stock of raw materials for 25 000€, of which 15 000 € are paid cash. At the end of the year, 10 000 € remain to be paid. During 2017, the company has: Manufactured 200 units of finished goods, the unit cost is 100€. Sold finished goods for 55 000€, paid cash. Paid manufacturing salaries for 8 000 €. Paid several administrative expenses for 8 000 €. At the end of the period, the physical count of the inventory yields the following figures: Raw materials: 15000 €. Finished goods: 50 units. Cost of goods sold for the period is:

Two friends create a company called Dream at the beginning of 2017. They each contributes with 20 000€ to the capital of the company. They paid for equipment costing 10 000 €. This equipment is depreciated using the unit-of-production method, with no salvage value. The equipment is used for manufacturing purposes only. The useful life of this equipment is measured in units, it will reach the end of its useful life when it reaches 1000 manufactured units. They also purchase an initial stock of raw materials for 25 000€, of which 15 000 € are paid cash. At the end of the year, 10 000 € remain to be paid. During 2017, the company has: Manufactured 200 units of finished goods, the unit cost is 100€. Sold finished goods for 55 000€, paid cash. Paid manufacturing salaries for 8 000 €. Paid several administrative expenses for 8 000 €. At the end of the period, the physical count of the inventory yields the following figures: Raw materials: 15000 €. Finished goods: 50 units. Cost of goods sold for the period is:

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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