Celestin Manufacturing Company incurred $5.000 of depreciation on ts manufacturi

Question

Celestin Manufacturing Company incurred $5.000 of depreciation on ts manufacturing equipmene during ts frit year of operation. During this year the company made product Based on this information aone the company would show O $5.000 of depreciation expense on its income statement O $4,000 of cost of goodts sold expense on ts income statement $5,000 or memory on its balance sheet O $4000 of inventory on as balance sheet O $4000 of cost of goods sold exgensment O $4,000 of cost of goods sold expense on its income statement 8. Brock Company makes candy Duning the most recent eccounting perod Brock paid $3,000 for raw materiets. $4,000 for tabor, and $2.000 for ovesheed costs thet were incurred to make candy Brock started nd competed 10:00unts of candy of which ELOOC were sold 8ased on sis informaton Brock wouid O $4,000 O s9000 O $7.200 O None of the above Ps

Explanation / Answer

     7 Celestin Manufacturing company The depreciation for the year                    5,000 Units Produced                    2,500 Depreciation per unit                          2 Units Sold                  2,000 So 2000*2 =$4000 will be part   of cost of goods sold in the   income statement and balance will be carried forward as Closing Inventory value to the next period. Therefore correct option is $4000 of COGS expense in the income statement.      8 Brock company Production cost Direct Materials                  3,000 Direct Labor                  4,000 Overhead                  2,000 Total Production cost                  9,000 Units Produced                10,000 Unit Production cost $                0.90 Total Units sold                  8,000 Cost Of Goods Sold                  7,200 So Brock will recognized $7200 as   the Cost of Goods Sold in Income Statement.

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