Empire Company is a manufacturer of smartphones. Its controller resigned in October 20X2. An inexperienced assistant...
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Empire Company is a manufacturer of smartphones. Its controller resigned in October 20X2. An inexperienced assistant accountant has prepared the following income statement for the month of October 20X2. Empire Company Income Statement For the Month Ended October 31, 20X2 Sales revenue Less: Operating expenses $780,000 Raw materi 264000 Direct labor 190000 Advertising 90000 Selling and 75000 Rent on fact 60000 Depreciation 45000 Depreciation 31000 Indirect labc Utilities expe Insurance e Net loss 28000 12000 8000 803000 $ (23,000) Prior to October 20X2, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other Inventory balances at the beginning and end of October were: Raw materials Work in process Finished goods October 1 18,000 20,000 30,000 October 31 $29,000 14,000 50,000 Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Prompt Work with your group members to answer the following prompts: Prepare a schedule of cost of goods manufactured for October 20X2. (Assume that all raw materials used were direct materials.) Prepare a correct income statement for October 20X2. Empire Company is a manufacturer of smartphones. Its controller resigned in October 20X2. An inexperienced assistant accountant has prepared the following income statement for the month of October 20X2. Empire Company Income Statement For the Month Ended October 31, 20X2 Sales revenue Less: Operating expenses $780,000 Raw materi 264000 Direct labor 190000 Advertising 90000 Selling and 75000 Rent on fact 60000 Depreciation 45000 Depreciation 31000 Indirect labc Utilities expe Insurance e Net loss 28000 12000 8000 803000 $ (23,000) Prior to October 20X2, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other Inventory balances at the beginning and end of October were: Raw materials Work in process Finished goods October 1 18,000 20,000 30,000 October 31 $29,000 14,000 50,000 Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. Prompt Work with your group members to answer the following prompts: Prepare a schedule of cost of goods manufactured for October 20X2. (Assume that all raw materials used were direct materials.) Prepare a correct income statement for October 20X2.
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First lets prepare the schedule of cost of goods manufactured for October 20X2 Schedule of Cost of Goods Manufactured Direct Materials Beginning Raw M... View the full answer
Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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