* Additional work: Overhead must be determined *

To calculate the overhead rate, divide the indirect costs by the direct costs and multiply by 100.

Part 1 connected with this problem (additional).

Natalie Nelson started Nelson Frame Company (NFC) to make a unique picture frame that she had invented. Ms. Nelson employs part-time workers as she needs them. Accounting information relevant to NFC's first month of operation follows. Assume ali transactions are cash transactions unless otherwise stated. Events 12 through 23 pertain to February through December of the first year. 12. NFC acquired an additional $40,000 by issuing common stock. 13. Purchased $12,500 of direct raw materials. 14. Used $11,600 of direct raw materials. 15. Pald direct labor production workers 58 per hour for 1,310 hours of work. 16. Applied the appropriate amount of overhead cost to work in process inventory. 17. Purchased $500 of production supplies. 18. Paid 58,900 for rental of manufacturing facility and equipment. 19. The company transferred 5,200 additional frames that cost $5 each from work in process to finished goods. 20. Sold 4.900 frames at a price of 89 each. 21. Pald $5,600 for general, selling and administrative expenses. 22. There was $150 of production supplies on hand at the end of the year. 23. Determine whether overhead is over- or underapplied. Close the manufacturing overhead account to cost of goods sold (an expense) In the Chapter 4 Homework Problem Excel workbook: A. Records these events in the transactions analysis model on the TA Tab B. Prepare journal entries for each transaction on the JE Tab C. Prepare a schedule of cost of goods manufactured and sold in the CGM-CGS Tab D. Prepare an income statement and a balance sheet for NFC's first year of operation in the FS Tab G H 0 P T RS V w Chapter 4 Homework Problem Transaction Analysis X 1 A Men' IS 4 Cash DM WIP in FG Inv. Prad Suppl To MOH CIRE Hvem Net Income Amount HB 12 4520 100 Common Retained Stock Earning 1.ID + 015 . . 7 9 . 10 It TE 15 18 17 18 10 29 21 9 .. 0 16 16 16 . 13 12 110 5.00 A 310 Bringlunes as offerethe Ending ancestor 31 trom Chap 1500 310 31 Natalie Nelson started Nelson Frame Company (NFC) to make a unique picture frame that she had invented. Ms. Nelson employs part-time workers as she needs them. Accounting information relevant to NFC's first month of operation follows. Assume ali transactions are cash transactions unless otherwise stated. Events 12 through 23 pertain to February through December of the first year. 12. NFC acquired an additional $40,000 by issuing common stock. 13. Purchased $12,500 of direct raw materials. 14. Used $11,600 of direct raw materials. 15. Paid direct labor production workers $8 per hour for 1,310 hours of work, 16. Applied the appropriate amount of overhead cost to work in process inventory. 17. Purchased $500 of production supplies. 18. Paid $8,900 for rental of manufacturing facility and equipment 19. The company transferred 5,200 additional frames that cost $5 each from work in process to finished goods. 20. Sold 4,900 frames at a price of $9 each. 21. Paid $5,600 for general, selling, and administrative expenses. 22. There was $150 of production supplies on hand at the end of the year. 23, Determine whether overhead is over- or underapplied. Close the manufacturing overhead account to cost of goods sold (an expense), In the Chapter 4 Homework Problem Excel workbook: A. Records these events in the transactions analysis model on the TA Tab B. Prepare journal entries for each transaction on the JE Tab C. Prepare a schedule of cost of goods manufactured and sold in the CGM-CGS Tab D. Prepare an income statement and a balance sheet for NFC's first year of operation in the FS Tab Chapter 4 Homework Problem Transaction Analysis 1 2 Income SP Cashews TG I. Revenue - Expenses Net Income Amount - .. - . . 0 -0 . Auto List Stockholders' Equity Pred. 4 Cash DM Im WIP Inw. FG Inv. MOH Common Retained Suppl. CTRL Stock Farnings 5 BR 4120 160 300 - 380 1,150 0 5.000 1.510 6 12 7 13 R 14 9 15 10 16 - 11 17 12 18 13 10 14 20 . 15 21 0 16 22 23 17 18 4.520 160 300 380 1.150 5,000 1,510 19 6,510 6,510 20 Beginning balances as of February 1 are the Ending Balances as of January 31 from Chapter 4 xample 2 -0 21 . . - . . . 0 . - . 0 0 - Ne Chang Chapter 4 Homework Problem Journal Entries Transaction Debit Credit 12 Amount 13 s 14 15 $ 16 17 18 19 20 21 22 23 Chapter 4 Homework Problem Statements of Cost of Goods Manufactured and cost of Goods Sold Nelson Frame Company Cost of Goods Manufactured and Sold For the First Year of Operation Beginning Direet Materials Inventory Direet Materials Purchases Direct Materials Available Ending Direct Materials Inventory Raw Materials Used Direct Labor Overhead Total Manufacturing Costs Beginning Work in Process Inventory Total Work in Process Inventory Ending Work in Process Inventory Cost of Goods Manufactured Beginning Finished Goods Inventory Goods Available for Sale Ending Finished Goods Inventory Cost of Goods Sold Chapter 4 Homework Problem Financial Statement Nelson Frame Company Income Statement For the First Year of Operation Sales Revenue Cost of Goods Sold Gross Margin General, Selling, and Administrative Expense Net Income Nelson Frame Company Blance Sheet As of December 31, Year 1 ASSETS Cash Production Supplies Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Total Assets EQUITY Common Stock Retained Earnings Total Equity Note: No liabilities in the exercise Chapter 4 Example 2 Transaction Analysis 1 2 3 Assets Liah. Income Statement Cash Flows 4 Prod. Suppl. Cash Stockholders' Equity Common Retained Steck Earnings DM 1. DM Inv. WIP Iny. MOH CTRL FG Inv. Revenues - Expenses Net Income Amount BB 0 1 * 5,000 -0 0 5,000 (1.200) 2 -0 . 1.200 (900) 900 + -0 -0 960 0 5 6 7 B 9 10 11 12 13 14 -------- 5 1,560 + 0 (960) (1.5601 (160) (610) 160 . 7 610 + 5.000 (1.200) -0 (9600 (1,5600 (160) (610) -- - 4.5000 (490) 4,520 INC 1,020 (1,020) -0 -0 9 2.880) 0 0 10 2,880 22,500) + 4.500 2.500 11 4.500 (490) 4,520 160 2.000 (490) 1,510 300 -0 386 00 2,000 (490) 1510 6,510 0 490 2.990 150 6.510 4,500 16 17 18 19 20 21 3 POOR - $12.750/1.500 DLH - $8.50 MOH per DUH 120 Dised $8.50 MOH per OH- $1,020 MOH applied to WIP