Able Baker Charlie Company Charles Maxwell is starting a cheesecake bakery, Able Baker Charlie Company, to produce and sell different flavored cheesecakes to restaurants and the general public. He has just begun his study of accounting, and is a bit confused about the many types of reports he has read about and how they will help him run his business. He asks you to help him clarify what the differences between managerial accounting and financial accounting are. He's also wondering how to set up his inventory, how to classify the costs of his business, and how to fill in some missing information. Required: 1. Choose whether the characteristics on the Managerial vs. Financial panel are most often associated with managerial accounting or financial accounting 2. Charles has provided some of the costs he expects to incur on the Cost Classification panel. Decide on the classifications that could be applied to each of these costs using the table provided. The cost object in each case is the cheesecake. 3. Charles found some sample income statements and balance sheets on the Internet, and asked which of them might be most appropriate for a manufacturing business like his. Review income statements A and B on the Income Statements panel, and balance sheets C and D on the Balance Sheets panel. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie. Then, on the Financial Statements panel, denote which income statement and balance sheet would be most appropriate for a manufacturing business. 4. At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the data he's collected, but he was unable to figure out some of the amounts. On the costs and Balances panel, determine the missing amounts. come Statements Sample Company A Income Statement For the Year Ended December 31, 2048 1 Sales $42,000.00 2 $5,250.00 3 6,400.00 4 Beginning finished goods inventory Cost of goods manufactured Cost of finished goods available for sale Ending finished goods inventory Cost of goods sold $11,650.00 (400.00) 5 6 11,250.00 7. Gross profit $30,750.00 8 Operating expenses: Selling expenses 9 $6,400.00 10 Administrative expenses 5,250.00 11 Total operating expenses 11,650.00 12 Net income $19,100.00 Balance Sheets Sample Company C Balance Sheet December 31, 20Y8 1 Assets 2 Cash $20,800.00 3 Accounts receivable (net) 10,000.00 4 Inventory 6,000.00 5 Supplies 2,100.00 6 Land 17,000.00 7 Total assets $55,900.00 8 Liabilities 9 Accounts payable $17,800.00 10 Stockholders' Equity 11 Common stock $19,000.00 12 Retained earnings 19,100.00 13 Total stockholders'equity 38,100.00 14 Total liabilities and stockholders' equity $55,900.00 Costs and Balances At the end of February, after the second month of operations of Able Baker Charlie Company, Charles shows you the date he's collected, but he was unable to figure out some of the amounts. Review the following data and in the missing amounts on the chart for Able Baker Charte Company. Note: It may be helpful to use accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be hope to review the steps to determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured Data for February Decrease in materials inventory $3,000 Materials inventory on Feb. 28 50% of materials inventory on Jan. 31 Direct materials purchased $11,700 Direct materials used 3 times the direct labor incurred Total manufacturing costs incurred in period $28,700 Total manufacturing costs incurred in period 70% of Cost of Goods Manufactured Total manufacturing costs incurred in period $8,000 less than Cost of Goods Sold Account Balances Jan. 31 Feb. 20 Costs incurred Account Materials Inventory Work in Process Inventory Finished Goods Inventory Direct Materials Used Direct Labor Incurred 21,000 15,500 Factory Overhead Incurred Cost of Goods Sold