10-23

c. Determine the amount of the ending inventory balance that would appear on the 2018, balance sheet d. Determine the amount of net income that would appear on the 2018 income stat e. Determine the amount of retained earnings that would appear on the December 31, 2018, r. Determine the amount of total assets that would appear on the December 31, 2018, ba ement. balance sheet Problem 10-23 Effect of product versus period costs on financial statements Sinclair Manufacturing Company experienced the following accounting events during its fi operation. With the exception of the adjusting entries for depreciation, assume that all trans cash transactions and that financial statement data are prepared in accordance with GAAP irst year actions are of I. Acquired $68,000 cash by issuing common stock. 2. Paid S8,700 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4,500 to selling and administrative employees. 4. Paid wages of $10,000 to production workers 5. Paid $9.600 for furniture used in selling and administrative offices. The furniture was January 1. It had a $1,600 estimated salvage value and a four-year useful life. 6. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life 7. Sold inventory to customers for $35,000 that had cost $14,000 to make. Required Explain how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example Financial Statements Mo Assets Equity Manuf. Office Com. nventory+ Equip." Furn.*Stk. . Rev Exp.Net Inc. Cash Flow 68,000 68,000 FA n as negative amounts in these columns. Problem 10-24 Product versus SG&A costs The following transactions pertain to 2018, the first-year operations of Gibson Company. All inven tory was started and completed during 2018. Assume that all transactions are cash transactions 1. Acquired $12,000 cash by issuing common stock. 2. Paid $4,700 for materials used to produce inventory 3. Paid $2,400 to production workers. 4. Paid $900 rental fee for production equipment. 5. Paid $350 to administrative employees Paid $400 rental fee for administrative office equipment. 400 units of inventory of which 360 units were sold at a pri