# Zell Manufacturing Company was started on January 1, 2019, when it acquired $98,000 cash by issuing common ## Question: Zell Manufacturing Company was started on January 1, 2019, when it acquired$98,000 cash by issuing common stock. Zell immediately purchased office furniture and manufacturing equipment costing $28,000 and$58,000, respectively. The office furniture had a four-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid$20,000 for salaries of administrative personnel and $27,000 for wages of production personnel. Finally, the company paid$39,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Zell completed production on 12,000 units of product and sold 10,000 units at a price of \$15 each in 2019. (Assume that all transactions are cash transactions and that all financial statement data are prepared in accordance with GAAP.)

Required

a. Determine the total product cost and the average cost per unit of the inventory produced in 2019.

b. Determine the amount of cost of goods sold that would appear on the 2019 income statement.

c. Determine the amount of the ending inventory balance that would appear on the December 31, 2019, balance sheet.

d. Determine the amount of net income that would appear on the 2019 income statement.

e. Determine the amount of retained earnings that would appear on the December 31, 2019, balance sheet.

f. Determine the amount of total assets that would appear on the December 31, 2019, balance sheet.

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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