How the events affected the balance sheet income statement

Assignment Help Accounting Basics

Reference no: EM132497591

Kirsoff company makes cbook readers. The company had the following amounts at the beginning of 2011

cash $660,000;

Raw materials inventory, $51,000;

work in process inventory, $18,000;

finished goods inventory, $43,000;

common stock, $583,000;

retained earnings, $189,000.

772,000

kirsoff experienced the following accounting events during 2011. other than the adjusting entries for depreciating, assume that all transactions are cash transactions.

1. paid $23, 000 of research and development costs.

2. paid $47,000 for raw materials that will be used to make ebook readers.

3. placed $83,000 for raw materials cost into the process of manufacturing ebook readers

4. paid $60,000 for salaries of selling and administrative employees

5. paid 91,000 for wages of production workers

6. paid $90,000 to purchase equipment used in selling and administrative offices

7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2011. It has a $10,000 salvage value and a five year life. The amount of depreciation is computed as [(cost-salvage)/useful life]. Specifically ($90,000-$10,000)/5=$16,000

8. paid $165,000 to purchase manufacturing equipment

9. recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2011. It has a $25,000 salvage value and a 7 year life. The amount of depreciation is computed as [(cost-salvage)/useful life]. Specifically, ($165,000-$25,000)/7=$20,000

10. paid $45,000 for rent and utilities cost on the manufacturing facility.

11. paid $70,000 inventory holding expense for completed ebook readers (rental of warehouse space, salaries of warehouse personnel, and other general store cost).

12. completed and transferred ebook readers that had a total cost of $240,000 from work and process inventory to finished goods

13. sold 1000 ebook readers for $420,000

14. it cost kirsoff $220,000 to make the ebook readers sold in event 13

required

Question a. Show how this events affected the balance sheet income statement and statement of cash flows by recording them in a horizontal financial statement model

Question b. explain why kirsoff recognition of cost of goods sold had no impact on cash flow

Question c. Prepare a schedule of cost of goods manufactured and sold, a formal income statement, and a balance sheet for the year

Reference no: EM132497591

Questions Cloud

Evaluate the value of assigning appropriate brand identities : Evaluate the value of assigning appropriate brand identities to represent health care goods, services, and institutions. Provide support for your rationale.

Determine the payback for the new center : Determine the net present value using a cost of capital of 15 percent. Should the project be accepted? Determine the payback for this new center.

Describe an assessment of the needs of the clients : Your first course project assignment is a written proposal that describes an assessment of the needs of the client(s) and why you feel this project would be.

Essay explaining what the main strategy development tools : foundational strategy development models and are able to relate them to current practical business examples - Write an essay explaining what the main strategy

How the events affected the balance sheet income statement : How the events affected the balance sheet income statement and statement of cash flows by recording them in a horizontal financial statement model

What are strategy development tools : Write a Comprehensive discussion of any three of the strategy models, with practical application to current business examples

How many of each type of air compressor company produce : Formulate and solve a linear optimization model using the auxiliary variable cells method and write short memo to the production manager explaining sensitivity

Describe the measurable outcomes you hope to achieve : Describe the measurable outcomes you hope to achieve with the implementation of this evidence-based change. Be sure to provide APA citations of the supporting.

Discusses the role of organizational power : Discusses the role of organizational power. In your opinion, what would be two or three examples of abuses of power in a healthcare organization?

User Account

All Pages