uart Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions uring year 1. All purchases and sales were made with cash. . Acquired $900,000 of cash from the owners. . Purchased $345,000 of manufacturing equipment. The equipment has a $45,000 salvage value and a four-year useful life. Label the purchase of the equipment as Event 2a and the recognition of depreciation as Event 2b. The company started and completed 6,500 modems. Direct materials purchased and used amounted to $55 per unit. Direct labor costs amounted to $40 per unit. . The cost of manufacturing supplies purchased and used amounted to $19 per unit. The company paid $65,000 to rent the manufacturing facility. Stuart sold all 6,500 units at a cash price of $195 per unit. Label the recognition of the sale as Event 7a and the cost of goods sold as Event 7b. (Hint: It will be necessary to determine the manufacturing costs in order to record the cost of goods sold.) The sales staff was paid a $13.50 per unit sales commission. Paid $54,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,500 salvage value and a three-year useful life. Label the purchase of the equipment as Event 9a and the recognition of depreciation as Event 9b. . Administrative expenses consisting of office rental and salaries amounted to $79,450. equired a. Record the transaction data for Stuart Modems, Inc, in the financial statements like the one shown as follows. The first transaction is recorded as an example. 1. Prepare an income statement. -2. Prepare a balance sheet.
uart Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions uring year 1. All purchases and sales were made with cash. . Acquired $900,000 of cash from the owners. . Purchased $345,000 of manufacturing equipment. The equipment has a $45,000 salvage value and a four-year useful life. Label the purchase of the equipment as Event 2a and the recognition of depreciation as Event 2b. The company started and completed 6,500 modems. Direct materials purchased and used amounted to $55 per unit. Direct labor costs amounted to $40 per unit. . The cost of manufacturing supplies purchased and used amounted to $19 per unit. The company paid $65,000 to rent the manufacturing facility. Stuart sold all 6,500 units at a cash price of $195 per unit. Label the recognition of the sale as Event 7a and the cost of goods sold as Event 7b. (Hint: It will be necessary to determine the manufacturing costs in order to record the cost of goods sold.) The sales staff was paid a $13.50 per unit sales commission. Paid $54,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,500 salvage value and a three-year useful life. Label the purchase of the equipment as Event 9a and the recognition of depreciation as Event 9b. . Administrative expenses consisting of office rental and salaries amounted to $79,450. equired a. Record the transaction data for Stuart Modems, Inc, in the financial statements like the one shown as follows. The first transaction is recorded as an example. 1. Prepare an income statement. -2. Prepare a balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Stuart Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions
during year 1. All purchases and sales were made with cash.
1. Acquired $900, 000 of cash from the owners.
2. Purchased $345, 000 of manufacturing equipment. The equipment has a $45,000 salvage value and a four-year useful
life. Label the purchase of the equipment as Event 2a and the recognition of depreciation as Event 2b.
3. The company started and completed 6,500 modems. Direct materials purchased and used amounted to $55 per unit.
4. Direct labor costs amounted to $40 per unit.
5. The cost of manufacturing supplies purchased and used amounted to $19 per unit.
The company paid $65,000 to rent the manufacturing facility.
7.
Stuart sold all 6,500 units at a cash price of $195 per unit. Label the recognition of the sale as Event 7a and
the cost of goods sold as Event 7b. (Hint: It will be necessary to determine the manufacturing costs in order to
record the cost of goods sold.)
8. The sales staff was paid a $13.50 per unit sales commission.
9. Paid $54,000 to purchase equipment for administrative offices. The equipment was expected to have a $4, 500 salvage
value and a three-year useful life. Label the purchase of the equipment as Event 9a and the recognition of
depreciation as Event 9b.
10. Administrative expenses consisting of office rental and salaries amounted to $79,450.
Required
a. Record the transaction data for Stuart Modems, Inc. in the financial statements like the one shown as follows. The first transaction
is recorded as an example.
b-1. Prepare an income statement.
b-2. Prepare a balance sheet.
Transcribed Image Text:STUART MODEMS, INC.
Balance Sheet
As of December 31, year 1
Assets:
Total assets
Equity:
Total stockholders' equity
< Req B1
Req B2 >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education