Here, in the given problem we are supposed to find out the effect of standard cost variances on cost of goods sold for Swain Company. Further, an income statement is required and also reporting closing balance of the Retained Earnings is required. Introduction: Standard costing is a cost accounting technique used by various organizations to identify the variances between the actual cost incurred and the cost that should have been incurred. Here, the organization sets predetermined estimates and then compare them with the actual amounts to determine the variances.

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Chapter 10.B, Problem 2E

To determine

Here, in the given problem we are supposed to find out the effect of standard cost variances on cost of goods sold for Swain Company. Further, an income statement is required and also reporting closing balance of the Retained Earnings is required.

Introduction:

Standard costing is a cost accounting technique used by various organizations to identify the variances between the actual cost incurred and the cost that should have been incurred. Here, the organization sets predetermined estimates and then compare them with the actual amounts to determine the variances.

To determine

Now, we are required to prepare the income statement for Swain for the year.

To determine

Now, we are required to ascertain Swain’s ending balance of retained earnings for the year.

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According to the accrual method of accounting, businesses make adjusting entries to ensure that their financial statements are correctly depicting their financial situation and performance. No matter when cash transactions take place, adjusting entries are required to record revenues when they are generated and expenses when they are incurred (Weygandt et al., 2022). In order to guarantee that financial statements present an accurate and impartial picture of their company's financial health, these entries help in bringing financial records into compliance with the revenue recognition and matching standards. In order to account for things like accumulated revenues, accrued expenses, depreciation, and prepaid expenses, adjusting entries are usually made at the conclusion of an accounting period prior to the preparation of financial statements (Kieso et al., 2020). By implementing these changes, businesses avoid making false representations in their financial reports, which enables…