The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: Purchased $320,000 of materials • Used $275,000 of direct materials in production • Incurred $236,000 of direct labor wages • Applied factory overhead at a rate of 75% of direct labor cost • Transferred $652,000 of work in process to finished goods Sold goods with a cost of $630,000 •Sold goods for $1,120,000 Incurred $252,800 of selling expenses • Incurred $100,000 of administrative expenses a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Focault Inc. Income Statement For the Month Ended July 31, 20Y2 Selling and administrative expenses: Total selling and administrative expenses b. Determine the inventory balances at the end of the first month of operations. Materials inventory, July 31 Work in process inventory, July 31 Finished goods inventory, July 31
The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: Purchased $320,000 of materials • Used $275,000 of direct materials in production • Incurred $236,000 of direct labor wages • Applied factory overhead at a rate of 75% of direct labor cost • Transferred $652,000 of work in process to finished goods Sold goods with a cost of $630,000 •Sold goods for $1,120,000 Incurred $252,800 of selling expenses • Incurred $100,000 of administrative expenses a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Focault Inc. Income Statement For the Month Ended July 31, 20Y2 Selling and administrative expenses: Total selling and administrative expenses b. Determine the inventory balances at the end of the first month of operations. Materials inventory, July 31 Work in process inventory, July 31 Finished goods inventory, July 31
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter1: Introduction To Managerial Accounting
Section: Chapter Questions
Problem 9E: Financial statements of a manufacturing firm The following events took place for Sorensen...
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Transcribed Image Text:Financial Statements of a Manufacturing Firm
The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes:
• Purchased $320,000 of materials
• Used $275,000 of direct materials in production
•Incurred $236,000 of direct labor wages
• Applied factory overhead at a rate of 75% of direct labor cost
•Transferred $652,000 of work in process to finished goods
• Sold goods with a cost of $630,000
• Sold goods for $1,120,000
•Incurred $252,800 of selling expenses
• Incurred $100,000 of administrative expenses
a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method.
Focault Inc.
Income Statement
For the Month Ended July 31, 20Y2
Selling and administrative expenses:
Total selling and administrative expenses
b. Determine the inventory balances at the end of the first month of operations.
Materials inventory, July 31
Work in process inventory, July 31
Finished goods inventory, July 31
%24
%24
Transcribed Image Text:Cost of Materials Issuances Under the FIFO Method
An incomplete subsidiary ledger of materials inventory for May is as follows:
a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.
Received
Issued
Balance
Receiving
Materials
Unit
Unit
Report
Quantity
Requisition
Quantity
Amount
Date
Quantity
Amount
Price
price
Number
Number
May 1
285
$30.00
$8,550
40
130
$32.00
May 4
91
365
May 10
44
110
38.00
May 21
97
100
May 27
Feedback
Check My Work
b. Determine the materials inventory balance at the end of May.
Feedback
Check My Work
C. Journalize the summary entry to transfer materials to work in process.
Work in Process /
Materials
%24
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