The following trial balance was taken from the records of Ansgar Manufacturing Company at the beginning of
Question:
The following trial balance was taken from the records of Ansgar Manufacturing Company at the beginning of 2018:
Transactions for the Accounting Period
1. Ansgar purchased $2,600 of direct raw materials and $300 of indirect raw materials on account. The indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $2,000 of direct raw materials had been used for production during the period. The use of indirect materials is determined at the end of the period by physically counting the supplies on hand at the end of the year.
2. By the end of the accounting period, $2,000 of the accounts payable had been paid in cash.
3. During the year, direct labor amounted to 1,200 hours recorded in the Wages Payable account at $3 per hour.
4. By the end of the accounting period, $3,250 of the Wages Payable account had been paid in cash.
5. At the beginning of the accounting period, the company expected overhead cost for the period to be $2,750 and 1,250 direct labor hours to be worked. Overhead is applied based on direct labor hours, which, as indicated in Event 3, amounted to 1,200 for the year.
6. Administrative and sales expenses for the period amounted to $700 paid in cash.
7. Utilities and rent for production facilities amounted to $1,500 paid in cash.
8. Depreciation on the plant and equipment used in production amounted to $1,000.
9. Assume that $7,500 of goods were completed during the period.
10. Assume that $5,000 of finished goods inventory was sold for $7,000 cash.
11. A count of the production supplies revealed a balance of $125 on hand at the end of the accounting period.
12. Any over- or under applied overhead is considered to be insignificant.
Required
a. Open T-accounts with the beginning balances shown in the preceding list and record all transactions for the period including closing entries in the T-accounts.
b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet.
Accounts PayableAccounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Step by Step Answer:
a b Ansgar Manufacturing Company Financial Statements for 2018 Cost of Goods Manf and Sold Income St...View the full answer
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
