McQueen Motor Company manufactures automobiles. During September 2020, the company purchased 5,000 head lamps at a cost

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McQueen Motor Company manufactures automobiles. During September 2020, the company purchased 5,000 head lamps at a cost of $15 per lamp. Fifty of these lamps were used to replace the head lamps in autos used by traveling sales staff, and 4,600 lamps were put in autos manufactured during the month. Of the autos put into production during September 2020, 90% were completed and transferred to the company’s storage lot. Of the cars completed during the month, 70% were sold by September 30.


Instructions
a. Determine the cost of head lamps that would appear in each of the following accounts at September 30, 2020: Raw Materials, Work in Process, Finished Goods, Cost of Goods Sold, and Selling Expenses.
b. Write a short memo to the chief accountant, indicating whether and where each of the accounts in (a) would appear on the income statement or on the balance sheet at September 30, 2020.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Accounting Principles

ISBN: 978-1119411482

13th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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