Perez Manufacturing Company was started on January 1, year 1, when it acquired $81,000 cash by issuing common stock. Perez immediately purchased office furniture and manufacturing equipment costing $7,700 and $34,500, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,300 salvage value and an expected useful life of four years. The company paid $11,900 for salaries of administrative personnel and $15,200 for wages to production personnel. Finally, the company paid $14,440 for raw materials that were used to make inventory. All inventory was started and completed during the year. Perez completed production on 4,800 units of product and sold 3,850 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in year 1. Note: Round "Average cost per unit" to 2 decimal places. b. Determine the amount of cost of goods sold that would appear on the year 1 income statement. Note: Do not round intermediate calculations. c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. d. Determine the amount of net income that would appear on the year 1 income statement. Note: Do not round intermediate calculations. e. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. f. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. a. Total product cost a. Average cost per unit b. Cost of good sold c. Ending inventory d. Net income e. Retained earnings f. Total assets
Perez Manufacturing Company was started on January 1, year 1, when it acquired $81,000 cash by issuing common stock. Perez immediately purchased office furniture and manufacturing equipment costing $7,700 and $34,500, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,300 salvage value and an expected useful life of four years. The company paid $11,900 for salaries of administrative personnel and $15,200 for wages to production personnel. Finally, the company paid $14,440 for raw materials that were used to make inventory. All inventory was started and completed during the year. Perez completed production on 4,800 units of product and sold 3,850 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in year 1. Note: Round "Average cost per unit" to 2 decimal places. b. Determine the amount of cost of goods sold that would appear on the year 1 income statement. Note: Do not round intermediate calculations. c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. d. Determine the amount of net income that would appear on the year 1 income statement. Note: Do not round intermediate calculations. e. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. f. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet. Note: Do not round intermediate calculations. a. Total product cost a. Average cost per unit b. Cost of good sold c. Ending inventory d. Net income e. Retained earnings f. Total assets
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 2EB: Johnson, Incorporated had the following transactions during the year: Purchased a building for...
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Transcribed Image Text:Perez Manufacturing Company was started on January 1, year 1, when it acquired $81,000 cash by issuing common stock. Perez
immediately purchased office furniture and manufacturing equipment costing $7,700 and $34,500, respectively. The office furniture
had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,300 salvage value and an expected
useful life of four years. The company paid $11,900 for salaries of administrative personnel and $15,200 for wages to production
personnel. Finally, the company paid $14,440 for raw materials that were used to make inventory. All inventory was started and
completed during the year. Perez completed production on 4,800 units of product and sold 3,850 units at a price of $15 each in year 1.
(Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)
Required
a. Determine the total product cost and the average cost per unit of the inventory produced in year 1.
Note: Round "Average cost per unit" to 2 decimal places.
b. Determine the amount of cost of goods sold that would appear on the year 1 income statement.
Note: Do not round intermediate calculations.
c. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet.
Note: Do not round intermediate calculations.
d. Determine the amount of net income that would appear on the year 1 income statement.
Note: Do not round intermediate calculations.
e. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet.
Note: Do not round intermediate calculations.
f. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet.
Note: Do not round intermediate calculations.
a. Total product cost
a. Average cost per unit
b. Cost of good sold
c. Ending inventory
d. Net income
e. Retained earnings
f. Total assets
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