
Concept explainers
a.
The total product cost and average cost per unit.
a.

Explanation of Solution
Product cost:
It is the cost incurred by the company during the process of manufacturing the product.
Given information:
- The raw material is $26,000.
- The wages for production workers are $21,000.
- Manufacturing equipment is $40,000, its salvage value is $4,000, and an expected life is 6 years.
- The completed production of Company S is 10,000 units.
The calculation of total product cost for the year 2018 is as follows:
Hence, the total cost of the product for the year 2018 is $53,000.
The calculation average cost per unit for the year 2018 is as follows:
Hence, the average cost per unit for the year 2018 is $5.30.
Working notes:
The calculation of manufacturing
Hence, the manufacturing overheads are $6,000.
(1)
b.
The cost of goods sold that appears in 2018 income statement.
b.

Explanation of Solution
Cost of goods sold
The cost of goods sold is the accumulation of all the direct costs incurred in the process of producing a product. It excludes the indirect expenses.
Given information:
- The total number of units sold by Company S is 8,000 units.
The calculation of total cost of goods sold for the year 2018 is as follows:
Hence, the total cost of goods sold is $41,400.
c.
The cost of ending inventory that appears on 31st December 2018
c.

Explanation of Solution
Inventory:
It is the term for products that are ready for sale and raw materials that are used in the making of the final product.
Given information:
- The total number of units sold by Company S is 8,000 units.
- The completed production of Company S is 10,000 units.
The calculation of ending inventory for the year 2018 is as follows:
Hence, the ending inventory for the year 2018 is $10,600.
d.
The total amount of net income for the year 2018.
d.

Explanation of Solution
Financial statement:
The financial statement which reports the revenues and expenses from business operations and the result of those operations as the net income or net loss for a particular time period is referred to as an income statement.
Given information:
- The raw material is $26,000.
- The wages for production workers is $21,000.
- Manufacturing equipment is $40,000, its salvage value is $4,000, and an expected life is 6years.
- The total number of units sold by Company S is 8,000 units at cost of $9 per unit.
- The completed production of Company S is 10,000 units.
- The common stock of the Company S is $89,000.
- The purchased furniture for office at $32,000 and an expected life is 8years.
- The Company pays $12,000 as salary and $21,000 as wages for the production purpose.
- Company S pays 26,000 for the raw materials.
The calculation of net income of the Company S for the year 2018 is as follows:
Table (2)
Hence, the net income of the Company for the year 2018 is $13,600.
Working note:
The calculation of
Hence, the depreciation value of furniture is $4,000.
(1)
The calculation of depreciation value for manufacturing equipment’s:
Hence, the depreciation value of the manufacturing equipment is $6,000.
(2)
The calculation of total units sold at the rate of $9 per unit.
The total units sold by the Company S are 72,000.
(3)
The calculation of total inventory at the average cost per unit.
The total inventory at the average cost is 42,400.
(4)
e.
The total amount of net income for the year 2018.
e.

Explanation of Solution
Financial statement:
The financial statement which reports the revenues and expenses from the business operations and the result of those operations as net income or net loss for a particular time period is referred to as an income statement.
Given information:
- The raw material is 26,000.
- The wages for production workers is $21,000.
- Manufacturing equipment is $40,000, its salvage value is $4,000, and an expected life is 6years.
- The total number of units sold by Company S is 8,000 units at cost of $9 per unit.
- The completed production of Company S is 10,000 units.
- The common stock of the Company S is $89,000.
- The purchased furniture for office at $32,000 and an expected life is 8 years.
- The Company pays $12,000 as salary and $21,000 as wages for the production purpose.
- Company S pays 26,000 for raw materials.
The calculation of
Table (3)
Hence, the net income of the Company for the year 2018 is $13,600.
Working note:
The calculation of depreciation value for furniture:
Hence, the depreciation value of furniture is $4,000.
(1)
The calculation of depreciation value for manufacturing equipment’s:
Hence, the depreciation value of manufacturing equipment is $6,000.
(2)
The calculation of total units sold at the rate of $9 per unit.
The total units sold by the Company S are 72,000.
(3)
The calculation of total inventory at the average cost per unit.
The total inventory at the average cost is 42,400.
(4)
f.
The total assets that appears on the balance sheet.
f.

Explanation of Solution
Financial statement:
The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as an income statement.
Given information:
- The raw material is $26,000.
- The wages for production workers is $21,000.
- Manufacturing equipment is $40,000, its salvage value is $4,000 and an expected life is 6years.
- The total number of units sold by Company S is 8,000 units at cost of $9 per unit.
- The completed production of Company S is 10,000 units.
- The common stock of the Company S is $89,000.
- The purchased furniture for office at $32,000 and an expected life is 8 years.
- The Company pays $12,000 as salary and $21,000 as wages for the production purpose.
- Company S pays 26,000 for raw materials.
The table showing calculation of assets:
Table (4)
The calculation of total assets is as follows:
Hence, the total amount of assets of the Company for the year 2018 is $102,600.
Working note:
The calculation of depreciation value for furniture:
Hence, the depreciation value of furniture is $4,000.
(1)
The calculation of depreciation value for manufacturing equipment’s:
Hence, the depreciation value of manufacturing equipment is $6,000.
(2)
The calculation of total units sold at the rate of $9 per unit.
The total units sold by the Company S are 72,000.
(3)
The calculation of total inventory at the average cost per unit.
The total inventory at the average cost is 42,400.
(4)
Want to see more full solutions like this?
Chapter 10 Solutions
Survey Of Accounting
- what is the company s net operating income ? general accounting questionarrow_forwardWhat information goes on the financial system? And please give an example.arrow_forwardMit Distributors provided the following inventory-related data for the fiscal year: Purchases: $385,000 Purchase Returns and Allowances: $10,200 Purchase Discounts: $4,300 Freight In: $55,000 Beginning Inventory: $72,000 Ending Inventory: $95,500 What is the Cost of Goods Sold (COGS)?arrow_forward
- answer ? general accountingarrow_forwardBrightTech Corp. reported the following cost of goods sold (COGS) figures over three years: • 2023: $3,800,000 • 2022: $3,500,000 • 2021: $3,000,000 If 2021 is the base year, what is the percentage increase in COGS from 2021 to 2023?arrow_forwardSun Electronics operates a periodic inventory system. At the beginning of 2022, its inventory was $95,750. During the year, inventory purchases totaled $375,000, and its ending inventory was $110,500. What was the cost of goods sold (COGS) for Sun Electronics in 2022?arrow_forward
- i want to this question answer of this general accountingarrow_forwardA clothing retailer provides the following financial data for the year. Determine the cost of goods sold (COGS): ⚫Total Sales: $800,000 • Purchases: $500,000 • Sales Returns: $30,000 • Purchases Returns: $40,000 • Opening Stock Value: $60,000 • Closing Stock Value: $70,000 Administrative Expenses: $250,000arrow_forwardsubject : general accounting questionarrow_forward
- BrightTech Inc. had stockholders' equity of $1,200,000 at the beginning of June 2023. During the month, the company reported a net income of $300,000 and declared dividends of $175,000. What was BrightTech Inc.. s stockholders' equity at the end of June 2023?arrow_forwardQuestion 3Footfall Manufacturing Ltd. reports the following financialinformation at the end of the current year: Net Sales $100,000 Debtor's turnover ratio (based on net sales) 2 Inventory turnover ratio 1.25 fixed assets turnover ratio 0.8 Debt to assets ratio 0.6 Net profit margin 5% gross profit margin 25% return on investments 2% Use the given information to fill out the templates for incomestatement and balance sheet given below: Income Statement of Footfall Manufacturing Ltd. for the year endingDecember 31, 20XX(in $) Sales 100,000 Cost of goods sold gross profit other expenses earnings before tax tax @ 50% Earnings after tax Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX(in $) Liabilities Amount Assets Amount Equity Net fixed assets long term debt 50,000 Inventory short term debt debtors cash Total Totalarrow_forwardi need correct answer of this general accounting questionarrow_forward
- Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningFinancial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningAccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,


