Brooks Corporation uses a job-order costing system to apply manufacturing costs to jobs. The company closes...

  

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Brooks Corporation uses a job-order costing system to apply manufacturing costs to jobs. The company closes its underapplied or overapplied overhead to cost of goods sold. Its balance sheet on March 1 is as follows: Brooks Corporation Balance Sheet March 1 Assets $ 102,000 Cash Raw materials Work in process Finished goods Prepaid expenses Property, plant, and equipment (net) $20, 200 16,000 24, 200 60, 400 2,560 239,000 $ 403,960 Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $ 21,700 382, 260 3 403,960 During March the company completed the following transactions: a. Purchased raw materials for cash, $84,800. b. Raw materials used in production, $101,900 ($84,600 was direct materials and $17,300 was indirect materials). c. Paid $220,850 of salaries and wages in cash ($125,250 was direct labor, $32,600 was indirect labor, and $63,000 was related to employees responsible for selling and administration). d. Various manufacturing overhead costs paid in cash to support production, $55,800. e. Depreciation recorded on property, plant, and equipment, $47,800 (85% related to manufacturing equipment and 15% related to assets that support selling and administration). f. Various selling expenses incurred on account, $30,40o. g. Prepaid insurance expired during the month, $640 (60% related to production, and 40% related to selling and administration). h. Manufacturing overhead applied to production, $143,409. 1. Cost of goods manufactured, $2 (Hint: The Work in Process balance on March 31st is $6,60o.) J. Cash sales to customers, $496,000. k. Cost of goods sold (unadjusted), $ (Hint: The Finished Goods balance at March 31st is $9,550.) I. Cash payments to creditors, $45,400. m. Underapplied or overapplied overhead $ 2 Required: 1. Calculate the ending balances that would be reported on the company's balance sheet at March 31st (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet) 2. Prepare Brooks Corporation's schedule of cost of goods manufactured for the month ended March 31st. 3. Prepare Brooks Corporation's schedule of cost of goods sold for the month ended March 31st 4. Prepare Brooks Corporation's income statement for the month ended March 31st. Brooks Corporation uses a job-order costing system to apply manufacturing costs to jobs. The company closes its underapplied or overapplied overhead to cost of goods sold. Its balance sheet on March 1 is as follows: Brooks Corporation Balance Sheet March 1 Assets $ 102,000 Cash Raw materials Work in process Finished goods Prepaid expenses Property, plant, and equipment (net) $20, 200 16,000 24, 200 60, 400 2,560 239,000 $ 403,960 Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $ 21,700 382, 260 3 403,960 During March the company completed the following transactions: a. Purchased raw materials for cash, $84,800. b. Raw materials used in production, $101,900 ($84,600 was direct materials and $17,300 was indirect materials). c. Paid $220,850 of salaries and wages in cash ($125,250 was direct labor, $32,600 was indirect labor, and $63,000 was related to employees responsible for selling and administration). d. Various manufacturing overhead costs paid in cash to support production, $55,800. e. Depreciation recorded on property, plant, and equipment, $47,800 (85% related to manufacturing equipment and 15% related to assets that support selling and administration). f. Various selling expenses incurred on account, $30,40o. g. Prepaid insurance expired during the month, $640 (60% related to production, and 40% related to selling and administration). h. Manufacturing overhead applied to production, $143,409. 1. Cost of goods manufactured, $2 (Hint: The Work in Process balance on March 31st is $6,60o.) J. Cash sales to customers, $496,000. k. Cost of goods sold (unadjusted), $ (Hint: The Finished Goods balance at March 31st is $9,550.) I. Cash payments to creditors, $45,400. m. Underapplied or overapplied overhead $ 2 Required: 1. Calculate the ending balances that would be reported on the company's balance sheet at March 31st (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet) 2. Prepare Brooks Corporation's schedule of cost of goods manufactured for the month ended March 31st. 3. Prepare Brooks Corporation's schedule of cost of goods sold for the month ended March 31st 4. Prepare Brooks Corporation's income statement for the month ended March 31st.

Answer rating: 100% (QA)

Ans 1 As the underapllied Mfg Oh is debited to Cost of Goods Sold there will be no impact on the val... View the full answer