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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Financial statements of a manufacturing firm
The following events look place for Bridger Bikes Inc. during July 20Y6, the first month of operations, as a producer of road bikes:

ℹ Purchased $340,000 of materials.

ℹ Used $329,000 of direct materials in production.

ℹ Incurred $160,000 of direct labor wages.

ℹ Applied factory overhead at a rate of 80% of direct labor cost.

ℹ Transferred $590,000 of work in process to finished goods.

ℹ Sold goods with a cost of $550,000.

ℹ Sold goods for $918,000.

ℹ Incurred $132,500 of selling expenses.

ℹ Incurred $80,000 of administrative expenses.

a.Prepare the July income statement for Bridger Bikes Inc. Assume that Bridger Bikes uses the perpetual inventory method.
b.Determine the inventory balances at the end of the first month of operations.

To determine

Concept Introduction:

Income statement are the statement which shows the income of the business it firstly includes all the expenses and then the sales of goods we calculate the profit by deducting the expenses from the sales.

Requirement-1:

To Calculate:

Prepare Income statement for July.

Explanation

Income statement are the statement ...

To determine

Concept Introduction:

Inventory includes all the type of the inventory like raw material inventory, work in progress inventory and the finished goods inventory.

Requirement-2:

To Calculate:

Calculate the inventory balances at the end of the month.

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