Jolly Manufacturing Company was started on January 1, 2011, when it acquired $90,000 cash by issuing common

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Jolly Manufacturing Company was started on January 1, 2011, when it acquired $90,000 cash by issuing common stock. Jolly immediately purchased office furniture and manufacturing equipment costing $10,000 and $28,000, respectively. The office furniture had a five-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of three years. The company paid $12,000 for salaries of administrative personnel and $16,000 for wages to production personnel. Finally, the company paid $18,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Jolly completed production on 5,000 units of product and sold 4,000 units at a price of $12 each in 2011.


Required

a. Determine the total product cost and the average cost per unit of the inventory produced in 2011.

b. Determine the amount of cost of goods sold that would appear on the 2011 income statement.

c. Determine the amount of the ending inventory balance that would appear on the December 31, 2011, balance sheet.

d. Determine the amount of net income that would appear on the 2011 income statement.

e. Determine the amount of retained earnings that would appear on the December 31, 2011, balance sheet.

f. Determine the amount of total assets that would appear on the December 31, 2011, balance sheet.

g. Determine the amount of net cash flow from operating activities that would appear on the 2011 statement of cash flows.

h. Determine the amount of net cash flow from investing activities that would appear on the 2011 statement of cash flows.


Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...
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Survey of Accounting

ISBN: 978-0078110856

3rd Edition

Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi

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