Costs and Balances 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 gure out some of the amounts. Review the following data and ll in the missing amounts on the chart for Able Baker Charlie Company. Nate: It may be helpful to use T accounts to map the flow of the amounts through the manufacturing accounts and solve for the missing dollar values. It may also be helpful to review the steps for determining the cost of materials used, total manufacturing cost incurred, and cost of goods manufactured. Data for February Decrease in materials inventory $2,700 Materials inventory on Feb. 28 50% of materials inventory on Jan. 31 Direct materials purchased $12,600 Direct materials used 3 times the direct labor incurred Total manufacturing costs incurred in period $29,400 Total manufacturing costs incurred in period 70% of Cost of Goods Manufactured Total manufacturing costs incurred in period $7,000 less than Cost of Goods Sold Account Balances Account Jan. 31 Feb. 28 Costs Incurred Materials Inventory X X Direct Materials Used J Direct Labor Incurred Work in Process Inventory Finished Goods Inventory X 15,500 Factory Overhead Incurred Cost of Goods Sold Feedback v Check My Work Set up T accounts for Materials, Work in Process, Finished Goods, and Cost of Goods Sold. Financial Statements 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, and balance sheets C and D. Determine which income statement and balance sheet would be most appropriate for a manufacturing business like Able Baker Charlie Company. Income Statement A Sample Company A Income Statement For the Vear Ended December 31, 20V8 Sales $42,000 Finished goods inventory, January 1, ZOYE $5,250 Cost of goods manufactured 6,400 Cost offinished goods available for sale $11,650 Finished goods inventory, December 31, 20Y8 (400) Cost of goods sold (11,250) Gross prot $30,750 Operating expenses: Selling expenses $6,400 Administrative expenses 5,250 Total operating expenses (11,650) Net income $19,100 Income Statement 3 Income Statement B Sample Company B Income Statement For the Year Ended December 31, 20Y8 Sales Beginning inventory $5,250 Net purchases 6,400 Inventory available for sale $11,650 Ending inventory (400) Cost of goods sold Gross prot Operating expenses: Selling expenses $6,400 Administrative expenses 5,250 Total operating expenses Net income Balance Sheet C $42,000 (11,250) $30,750 (11,550) $19, 100 Balance Sheet C Sample Company C Balance Sheet December 31, 20Y8 Assets Cash Accounts receivable (net) Inventory Supplies Land Total assets Liabilities Accounts payable Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Balance Sheet D $19,000 19,100 $20,800 10,000 6,000 2,100 17,000 $55,900 $17,800 33,100 $55,900 > Sample Company D Balance Sheet December 31, 20Y8 Cash Accounts receivable (net) Inventory: Direct materials Work in process Finished goods Total inventory Supplies Land Total assets Accounts payable Common stock Retained earnings Total stockholders' equity Assets Liabilities Stockholders' Equity Total liabilities and stockholders' equity $2,500 1,500 2,000 $19,000 19,100 $20,800 10,000 6,000 2,100 17,000 $55,900 $17,800 38,100 $55,900 Which income statement is most appropriate for a manufacturing business? Income statement A Which balance sheet is most appropriate for a manufacturing business? Balance sheet D '1! '~/