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Merck Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions. Issued common stock for $85,000.
- Merck Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions.
- Issued common stock for $85,000.
- Paid $28,000 cash to purchase raw materials used to make products.
- Transferred $23,000 of raw materials to the production department.
- Paid $34,000 cash for labor used to make products.
- Paid $40,000 cash for overhead costs (assume actual and estimated overhead are the same).
- Finished work on products that cost $95,000 to make.
- Sold products that cost $81,000 to make for $120,000 cash.
- Required:
- Prepare the December 31, Year 1, balance sheet.
- Prepare the December 31, Year 1, income statement.
- Issued common stock for $85,000.
- Paid $28,000 cash to purchase raw materials used to make products.
- Transferred $23,000 of raw materials to the production department.
- Paid $34,000 cash for labor used to make products.
- Paid $40,000 cash for overhead costs (assume actual and estimated overhead are the same).
- Finished work on products that cost $95,000 to make.
- Sold products that cost $81,000 to make for $120,000 cash.
- Prepare the December 31, Year 1, balance sheet.
- Prepare the December 31, Year 1, income statement.
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