Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 26P
a.
To determine
The
a.
Expert Solution
Answer to Problem 26P
The calculation of income statement of Company W is as follows:
Table (1)
Hence, the net income of Company W is $23,000.
The calculation of balance sheet of Company W is as follows:
Table (2)
Explanation of Solution
Income statement:
Income statement is the financial statement of a company that shows all the revenues earned and expenses incurred by the company over a period of time.
Balance sheet:
Balance sheet is one of the financial statements that summarize the assets, the liabilities, and the shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.
Working notes:
The entire $65,000 is treated as operating expenses.
(1)
The total cash is calculated as follows:
Hence, the total cash is $93,000.
(2)
b.
To determine
The balance sheet and income statement of Company W according to GAAP.
b.
Expert Solution
Answer to Problem 26P
The calculation of income statement of Company W is as follows:
Table (3)
Hence, the net income of Company W is $75,000.
The calculation of balance sheet of Company W is as follows:
Table (4)
Explanation of Solution
Income statement:
Income statement is the financial statement of a company that shows all the revenues earned and expenses incurred by the company over a period of time.
Balance sheet:
Balance sheet is one of the financial statements that summarize the assets, the liabilities, and the shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.
Working notes:
The
Hence, the depreciation is $13,000.
(3)
The depreciation amount $13,000 must be adjusted in the balance sheet as
(4)
c.
To determine
The balance sheet and income statement of Company W according to GAAP.
c.
Expert Solution
Answer to Problem 26P
The calculation of income statement of Company W is as follows:
Table (5)
Hence, the net income of Company W is $54,500.
The calculation of balance sheet of Company W is as follows:
Table (6)
Explanation of Solution
Income statement:
Income statement is the financial statement of a company that shows all the revenues earned and expenses incurred by the company over a period of time.
Balance sheet:
Balance sheet is one of the financial statements that summarize the assets, the liabilities, and the shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.
Working notes:
The depreciation on the manufacturing equipment is calculated as follows:
Hence, the depreciation cost is $8,000.
The cost per unit is calculated as follows:
Hence, the cost per unit is $19.
Calculate the cost of goods sold:
Hence, the cost of goods sold is $28,500.
(5)
The total finished goods are calculated as follows:
Hence, the finished goods are $9,500.
(6)
The depreciation on the manufacturing equipment is calculated as follows:
Hence, the accumulated depreciation cost is $8,000.
(7)
d.
To determine
Explain the reason why management might be more interested in average cost than the actual cost.
d.
Expert Solution
Explanation of Solution
The exact cost of the product cannot be determined because the labor and material usage will differ among the same products. Cost average is an element that smoothens these differences.
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2,342
(a1)
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Chapter 10 Solutions
Survey Of Accounting
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
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