On 1/1/2020 Abbott Lamp Corporation is a manufacturer of Mountain Dew, Sprite and Coca-cola Lamps.  

Abbott Lamp Corporation begins 2020 with the following Balance Sheet:

Cash                           $30,000                      Accounts Payable                                         0

A/R                                        0                     Loan Payable                                                0

Inventory                               0                     Total Liabilities                                            0

PP&E                                    0                     Contributed Capital                          $10,000

Accumulated Depreciation    0                     Retained Earnings                            $20,000

Total Assets              $10,000                      Total Liabilities + Owner's Equity           $30,000

Other 2020 estimated information is as follows:

Utilities                                                          $800

Indirect Materials/grease                              $200

Indirect Labor/clean up of facility                $400

Rent on production facility                          $400

Depreciation on factory equipment              $200

REQUIRED:

1. Abbott allocates overhead based upon direct labor hours (DLH). Estimate the OVERALL predetermined overhead rate. Abbott estimates that it will incur 400 dlh for year. (3 pts).

1. On 1/1/20, ALC obtains a lamp-making machine for $1000 - on account. It has a 0 salvage value and a useful life of 5 years. Please give the journal entry to describe this transaction (3 pts)

1. On 1/1/20, ALC purchased 500 lbs (pounds) of grease at $2/pound ON ACCOUNT. (Please give this journal entry. (3 pts).

1. On 1/1/20, ALC purchases - on account - 100 Mountain Dew Cans for $100. It also purchases - on account - 100 Coca-Cola Cans for $100. It also purchases - on account - 100 SPRITE cans for $100. Please give the journal entry to record this transaction (3 pts).

1. On 1/1/20, ALC purchases - on account - 100 pieces of paper for $100. Please give the journal entry to describe this transaction (3 pts).

1. During the year, ALC Mountain Dew Lamp workers, requisitioned out 10 Mountain Dew Cans and 5 pieces of paper.  Give the journal entry to describe this transaction (3 pts).

1. During the year, ALC Coca-Cola Lamp workers requisitioned out 10 Coca-Cola cans and 10 pieces of paper. Give the journal entry (3 pts).

1. During the year, ALC Sprite Lamp workers requisitioned out 10 Sprite cans and 5 pieces of paper. Give the journal entry (3 pts).

1. During the year, ALC Coca-cola lamp workers requisitioned out 200 pounds of grease to helps make lamps. Please give the journal entry (3 pts

1. During the year, ALC paid the following IN CASH:

Administrative Salaries to CEO, accountant, etc..                                       $2,000

Mntn. Dew Lamp workers for direct labor (200dlh*$5/dlh)                       $1,000

Coca-Cola Lamp workers (100 dlh * $10/dlh)                                            $1,000

Sprite Lamp workers (200 dlh*$20/dlh)                                                      $4,000

Janitor for manufacturing facility/clean up                                                  $400

Rent on corporate headquarters                                                                   $300

Rent on production facility                                                                          $250

Utilities for production facilities                                                                 $1,200

Please give the journal entry (6 pts).

1. Give the journal entry to APPLY overhead (6 pts).

1. During the year, ALC MADE 10 MOUNTAIN DEW LAMPS and SOLD 5 Mountain Dew Lamps ON ACCOUNT for $1,000/lamp. Give the journal entry to describe the SALES transaction (5 pts).

1. During the year, ALC MADE 10 COCA-COLA LAMPS and SOLD 8 Coca-Cola Lamps for $500/lamp (or $4,000 total) in CASH. Give the journal entry to describe the SALES transaction (5 pts).

1. During the year, ALC MADE 10 SPRITE LAMPS and SOLD 5 Sprite Lamps for $800/lamp (or $4,000 total) in CASH. Give the journal entry to describe the SALES transaction (5 pts).

1. Give any adjusting journal entries needed on 12/31 (AND YOU DO NOT NEED TO DO THE INCOME STATEMENT CLOSING ENTRY). You may assume that all of the over/under applied overhead is closed to cost of goods sold (COGS) (6 pts).

1. Based upon 1-15 above, PREPARE THE INCOME STATEMENT FOR THE YEAR (4 pts).

Answer rating: 100% (QA)

Answer SolutionExplanation 1 Pre determined Overhead Rate 15 2 Acquisition of Lamp mak... View the full answer