Problem 11-18A Manufacturing cost flow for monthly and annual accounting periods
ID: 2527726 • Letter: P
Question
Problem 11-18A Manufacturing cost flow for monthly and annual accounting periods LO 11-1, 11-2, 11-3
Evelyn Rundle started Rundle Manufacturing Company to make a universal television remote control device that she had invented. The company’s labor force consisted of part-time employees. The following accounting events affected Rundle Manufacturing Company during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated.)
Transactions for January 2018, First Month of Operation
1 Issued common stock for $10,000.
2 Purchased $430 of direct raw materials and $60 of production supplies.
3 Used $260 of direct raw materials.
4 Used 80 direct labor hours; production workers were paid $9.50 per hour.
5 Expected total overhead costs for the year to be $3,200, and direct labor hours used during the year to be 1,000. Calculate an overhead rate and apply the appropriate amount of overhead costs to Work in Process Inventory.
6 Paid $143 for salaries to administrative and sales staff.
7 Paid $23 for indirect manufacturing labor.
8 Paid $205 for rent and utilities on the manufacturing facilities.
9 Started and completed 100 remote controls during the month; all costs were transferred from the Work in Process Inventory account to the Finished Goods Inventory account.
10 Sold 70 remote controls at a price of $21.4 each.
Transactions for Remainder of 2018
11 Acquired an additional $18,500 by issuing common stock.
12 Purchased $3,900 of direct raw materials and $905 of production supplies.
13 Used $3,000 of direct raw materials.
14 Paid production workers $9.50 per hour for 890 hours of work.
15 Applied the appropriate overhead cost to Work in Process Inventory.
16 Paid $1,554 for salaries of administrative and sales staff.
17 Paid $239 of indirect manufacturing labor cost.
18 Paid $2,410 for rental and utility costs on the manufacturing facilities.
19 Transferred 900 additional remote controls that cost $12.76 each from the Work in Process Inventory account to the Finished Goods Inventory account.
20 Determined that $167 of production supplies was on hand at the end of the accounting period.
21 Sold 860 remote controls for $21.40 each.
22 Determine whether the overhead is over- or underapplied. Close the Manufacturing Overhead account to the Cost of Goods Sold account.
23 Close the revenue and expense accounts.
Required
For each of the above transactions, post the effects to the appropriate T-accounts.
Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2018.
Complete this question by entering your answers in the tabs below.
For each of the above transactions, post the effects to the appropriate T-accounts. (Do not round intermediate calculations.)
Cash
Common Stock
End. bal.
End. bal.
Raw Materials
Retained Earnings
End. bal.
End. bal.
Manufacturing Overhead
Sales Revenue
End. bal.
0
0
End. bal.
0
0
Work in Process
Cost of Goods Sold
End. bal.
0
0
End. bal.
Finished Goods
Selling and Administrative Expenses
End. bal.
End. bal.
0
0
Production Supplies
End. bal.
RUNDLE MANUFACTURING COMPANY
Cost of Goods Manufactured and Sold
For the Year, 2018
Raw materials available
0
Raw materials used
0
Total manufacturing costs
0
Total work in process inventory
0
Cost of goods manufactured
0
Goods available for sale
0
Cost of goods sold
$0
Prepare an income statement for 2018. (Do not round intermediate calculations.)
Do not round intermediate calculations.
RUNDLE MANUFACTURING COMPANY
Income Statements
For the Year, 2018
0
$0
· Req B CGM Sched
RUNDLE MANUFACTURING COMPANY
Balance Sheets
At the year ended 2018
Assets
Total assets
$0
Equity
Total equity
$0
Explanation / Answer
Cash Common Stock Dr Cr Dr Cr Jan-18 To Common Stock 10000 Jan-18 By Cash 10000 Jan-18 By raw materials 430 Dec-18 By Cash 18500 Jan-18 By prod. Supplies 60 End. bal. 28500 Jan-18 By labour 760 Jan-18 By salaries sales staff 143 Jan-18 To Indirect labor 23 Jan-18 To rent 205 Jan-18 Receipts from sales 1498 Jan-18 By balance c/f 9877 Jan-18 Total 11498 11498 Feb-18 To balance b/f 9877 Dec-18 To Common Stock 18500 Dec-18 By raw materials 3900 Dec-18 By prod. Supplies 905 Dec-18 By labour 8455 Dec-18 By salaries sales staff 1554 Dec-18 To Indirect labor 239 Dec-18 To rent 2410 Dec-18 Receipts from sales 18404 Dec-18 End Balance 29318 Total 46781 17463 Raw Materials Retained Earnings Jan-18 To Cash 430 Jan-18 By WIP 260 Jan-18 End. bal. 170 430 430 End. bal. Feb-18 To Op. Bal 170 Dec-18 To Cash 3900 Jan-18 By WIP 3000 Jan-18 End. bal. 1070 4070 4070 Manufacturing Overhead Sales Revenue Jan-18 By Sales 1498 Jan-18 To Cash - Indirect labor 23 Jan-18 End. Bal 1498 Jan-18 To Cash - rent 205 Dec-18 By Sales 18404 Jan-18 End bal 228 End. bal. 0 0 19902 Dec-18 To Cash - Indirect labor 239 Dec-18 To Cash - rent 2410 Dec-18 End bal 2649 Work in Process Cost of Goods Sold Jan-18 To Materials 260 Jan-18 To WIP 1020 Jan-18 To Labour 760 Jan-18 To Manufacturing Overheads 228 ($9.50 x 80) Jan-18 To Production Supplies 60 Jan-18 End bal 1020 Dec-18 To Materials 3000 End. bal. 1308 Dec-18 To Labour 8455 Jan-18 To Finished Goods 1308 ($9.50 x 890) Dec-18 To WIP 11455 Dec-18 End bal 11455 Dec-18 To Manufacturing Overheads 2649 Dec-18 To Production Supplies 738 End. bal. 14842 Dec-18 To WIP 14842 16150 End. bal. Finished Goods Selling and Administrative Expenses Jan-18 To Cost of Goods sold 1308 Jan-18 Sales 916 Dec-18 To Cost of Goods sold 14842 Jan-18 To Cash -salaries 143 Dec-18 Sales 10974 Dec-18 To Cash -salaries 1554 End. bal. 4260 End. bal. 0 1697 16150 16150 Production Supplies Jan-18 To Cash -purchases 60 Jan-18 End. bal. 60 Dec-18 To Cash -purchases 905 Dec-18 On hand 167 Dec-18 Utilised 738 RUNDLE MANUFACTURING COMPANY Income Statements For the Year, 2018 Sales 19902 Less Cost of Goods sold -16150 Selling & Admin expenses -1697 Profit 2055 $0 RUNDLE MANUFACTURING COMPANY Balance Sheets At the year ended 2018 Assets Cash 29318 Raw Materials 1070 Prod supplies 167 Total assets 30555 Equity 28500 Profit 2055 Total equity 30555