Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P19-5B Quintana Company is a manufacturer of toys. Its controller resigned in August 2012. An inexperienced assistant accountant has prepared the following income statement for

image text in transcribed

P19-5B Quintana Company is a manufacturer of toys. Its controller resigned in August 2012. An inexperienced assistant accountant has prepared the following income statement for the month of August 2012 $675,000 QUINTANA COMPANY Income Statement For the Month Ended August 31, 2012 Sales (net) Less: Operating expenses Raw materials purchases $220,000 Direct labor cost 160,000 Advertising expense 75,000 Selling and administrative salaries 70,000 Rent on factory facilities 60,000 Depreciation on sales equipment 50.000 Depreciation on factory equipment 35,000 Indirect labor cost 20,000 Utilities expense 10,000 Insurance expense 5,000 Net loss 705.000 S430,000) Prior to August 2012 the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows 1. Inventory balances at the beginning and end of August were: August 1 August 31 Raw materials $19.500 $30,000 Work in process 25,000 21.000 Finished goods 40.000 59.000 2. Only 50% of the utilities expense and 70% of the insurance expense apply to factory operations, the remaining amounts should be charged to selling and administrative activities. Instructions (a) Prepare a cost of goods manufactured schedule for August 2012 (b) Prepare a correct income statement for August 2012

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What The Numbers Mean

Authors: David Marshall

13th Edition

1264126743, 9781264126743

More Books

Students also viewed these Accounting questions

Question

Find all second partial derivatives of f . f(x, y, z) = x k y l z m

Answered: 1 week ago

Question

Do I own something similar already?

Answered: 1 week ago