The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: • Purchased $404,710 of materials • Used $344,090 of direct materials in production • Incurred $298,900 of direct labor wages • Applied factory overhead at a rate of 78% of direct labor cost • Transferred $814,310 of work in process to finished goods • Sold goods with a cost of $781,480 • Sold goods for $1,396,720 • Incurred $319,130 of selling expenses • Incurred $120,230 of administrative expenses Required: A. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. B. Determine the inventory balances at the end of the first month of operations.
The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: • Purchased $404,710 of materials • Used $344,090 of direct materials in production • Incurred $298,900 of direct labor wages • Applied factory overhead at a rate of 78% of direct labor cost • Transferred $814,310 of work in process to finished goods • Sold goods with a cost of $781,480 • Sold goods for $1,396,720 • Incurred $319,130 of selling expenses • Incurred $120,230 of administrative expenses Required: A. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. B. Determine the inventory balances at the end of the first month of operations.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter7: Inventories
Section: Chapter Questions
Problem 3PEA: Beginning inventory, purchases, and sales for Item Gidget are as follows: Assuming a perpetual...
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10. The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes:
• | Purchased $404,710 of materials |
• | Used $344,090 of direct materials in production |
• | Incurred $298,900 of direct labor wages |
• | Applied factory overhead at a rate of 78% of direct labor cost |
• | Transferred $814,310 of work in process to finished goods |
• | Sold goods with a cost of $781,480 |
• | Sold goods for $1,396,720 |
• | Incurred $319,130 of selling expenses |
• | Incurred $120,230 of administrative expenses |
Required: | |
A. | Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. |
B. | Determine the inventory balances at the end of the first month of operations. |
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