College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Chapter 26, Problem 1CP
1.
To determine
Calculate the net income for the year by transferring the underapplied
2.
To determine
Calculate the net income for the year by spreading the underapplied overhead among Work in Process, Finished Goods and Cost of Goods Sold.
3.
To determine
(a) Identify the difference in the net income based on the two different approaches to accounting for the under applied overhead.
(b) Provide the type of accounting that will recommended for the underapplied overhead for the given situation.
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Worth Company reported the following year-end information- beginning work in process inventory, $180,000; cost of goods manufactured, $866,000; beginning finished goods inventory, $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year is?
requirement: with solution
Whipple Company has sales revenue of $585,000. Cost of goods sold before adjustment is $335,000. The company uses machine hours to allocate manufacturing overhead and estimated 10,450 machine hours would be used during the year. For the year, manufacturing overhead was under-allocated by $13,400. The company's actual manufacturing overhead is $91,000.
What is the actual gross profit?
Select one:
a. $250,000
b. $159,000
c. $236,600
d. $104,400
e. $263,400
AJ Manufacturing Company Incurred $55,500 of fixed product cost and $44,400 of variable product cost during its first year of
operation. Also during its first year, AJ incurred $17.650 of fixed and $14.100 of variable selling and administrative costs. The company
sold all of the units it produced for $182.000.
Required
a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP)
b. Prepare an income statement using the contribution margin approach.
Complete this question by entering your answers in the tabs below.
Required A Required B
Prepare an income statement using the format required by generally accepted accounting Principles (GAAP).
AJ MANUFACTURING COMPANY
Income Statement
Chapter 26 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 26 - Prob. 1TFCh. 26 - Prob. 2TFCh. 26 - Prob. 3TFCh. 26 - Prob. 4TFCh. 26 - Prob. 5TFCh. 26 - Prob. 1MCCh. 26 - Prob. 2MCCh. 26 - When total anticipated factory overhead is 500,000...Ch. 26 - When direct labor hours for Job 101 are 30 and the...Ch. 26 - Prob. 5MC
Ch. 26 - Prob. 1CECh. 26 - Prob. 2CECh. 26 - Prob. 3CECh. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQCh. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 14RQCh. 26 - Prob. 15RQCh. 26 - COST OF GOODS SOLD SECTION The following...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED The...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOURNAL ENTRIES FOR FACTORY OVERHEAD Huang Company...Ch. 26 - PREDETERMINED FACTORY OVERHEAD RATE Millerlile...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, OVERHEAD, AND...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED AND COST OF...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOB ORDER COSTING TRANSACTIONS Stonestreet...Ch. 26 - JOB ORDER COSTING WITH UNDER- AND OVERAPPLIED...Ch. 26 - COST OF GOODS SOLD SECTION The following...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED The...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOURNAL ENTRIES FOR FACTORY OVERHEAD Bandy Company...Ch. 26 - PREDETERMINED FACTORY OVERHEAD RATE Marston...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, OVERHEAD, AND...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED AND COST OF...Ch. 26 - Prob. 8SPBCh. 26 - Prob. 9SPBCh. 26 - Prob. 10SPBCh. 26 - Prob. 1MYWCh. 26 - Forester Manufacturing Company uses a job order...Ch. 26 - Prob. 1CP
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- Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.arrow_forwardHousley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the underapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the debit balance in Under-and Overapplied Factory Overhead.arrow_forwardAJ Manufacturing Company incurred $58,000 of fixed product cost and $46,400 of variable product cost during its first year of operation. Also during its first year, AJ incurred $18,400 of fixed and $14,600 of variable selling and administrative costs. The company sold all of the units it produced for $192,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). AJ MANUFACTURING COMPANY Income Statement Required A Required B >arrow_forward
- Worth Company reported the following year-end information: beginning work in process inventory, $180,0003; cost of goods manufactured, $866,000; beginning finished goods inventory, $252,000; ending work in process inventory, $220,000; and ending finished goods inventory, $264,000. Worth Company's cost of goods sold for the year isarrow_forwardAJ Manufacturing Company incurred $55,000 of fixed product cost and $44,000 of variable product cost during its first year of operation. Also during its first year, AJ incurred $17,500 of fixed and $14,000 of variable selling and administrative costs. The company sold all of the units it produced for $180,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach.arrow_forwardAJ Manufacturing Company incurred $50,500 of fixed product cost and $40.400 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,150 of fixed and $13,100 of variable selling and administrative costs. The company sold all of the units it produced for $162,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach. Complete this question by entering your answers in the tabs below. Required A Required B Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). AJ MANUFACTURING COMPANY Income Statement Required B > Mc Graw Hillarrow_forward
- ABC began operations at the beginning of the current year and keeps absorption-cost accounting records. There is no beginning finished-goods inventory. ABC achieved its planned production level for the year. The company's fixed manufacturing overhead totaled RM188,000, and the firm paid a 10% commission based on gross sales (RM) to its sales force. On the company's profit or loss statement and end-of-year statement of financial position, the following information was included: Profit or Loss Data: RM Sales revenues (35,000 units @ RM24) 840,000 Gross Margin 210,000 Total sales and administrative expenses 160,000 Financial Position Data: Ending finished-goods inventory (12,000 units) 216,0000 Compute the number of units that ABC planned to produce during the year.arrow_forwardABC began operations at the beginning of the current year and keeps absorption-cost accounting records. There is no beginning finished-goods inventory. ABC achieved its planned production level for the year. The company's fixed manufacturing overhead totaled RM188,000, and the firm paid a 10% commission based on gross sales (RM) to its sales force. On the company's profit or loss statement and end-of-year statement of financial position, the following information was included: Profit or Loss Data: RM Sales revenues (35,000 units @ RM24) 840,000 Gross Margin 210,000 Total sales and administrative expenses 160,000 Financial Position Data: Ending finished-goods inventory (12,000 units) 216,0000 Compute ABC's cost of goods sold using absorption costing.arrow_forwardThe total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $725,000; the unadjusted cost of goods sold totaled $665,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)arrow_forward
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