EX 2-14 Financial statements of a manufacturing firmObj. 2 The following events took place for Chi-Lite Inc. during June, the firstmonth of operations as a producer of road bikes:EXCEL TEMPLATE• Purchased $400,000 of materials.• Used $343,750 of direct materials in production.• Incurred $295,000 of direct labor wages.Applied factory overhead at a rate of 75% of direct labor cost.Transferred $815,000 of work in process to finished goods.• Sold goods with a cost of $789,000.• old goods for $1,400,000.• Incurred $316,000 of selling expenses.• Incurred $125,000 of administrative expenses.A. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetualinventory method.AnswerB. Determine the inventory balances at the end of the first month of operations. InstructionsAnswers are entered in the cells with gray backgrounds.Cells with non-gray backgrounds are protected and cannot be edited.An asterisk (*) will appear to the right of an incorrect entry.А.Chi-Lite Inc.Income StatementFor the Month Ended June 30RevenuesGross profitSelling and administrative expenses:Total selling and administrative expensesIncome from operationsВ.Materials inventory:Purchased materialsLess: Materials used in productionMaterials inventory, June 30Work in process inventory:Materials used in productionDirect laborFactory overheadAdditions to work in processLess: Transferred to finished goodsWork in process inventory, June 30Finished goods inventory:Transferred to finished goodsLess: Cost of goods soldFinished goods inventory, June 30

The question is based on the concept of cost accounting.

Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $815,000 of work in process to finished goods.

Obj. 2 The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: • Purchased $400,000 of materials. • Used $343,750 of direct materials in production. • Incurred $295,000 of direct labor wages. Applied factory overhead at a rate of 75% of direct labor cost. • Transferred $815,000 of work in process to finished goods.

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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