Chap 10 Prob 22 Saved Help Save & Exit Submit Check my work Gibson Manufacturing

Question

Chap 10 Prob 22 Saved Help Save & Exit Submit Check my work Gibson Manufacturing Company was started on January 1, 2018, when it acquired $78,000 cash by issuing common stock. Gibson immediately purchased office furniture and manufacturing equipment costing $9,800 and $25,500, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,000 salvage value and an expected useful life of three years. The company paid $11,200 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $15,220 for raw materials that were used to make inventory. All inventory was started and completed during the year. Gibson completed production on 4,900 units of product and sold 3,960 units at a price of $15 each in 2018. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP) 30 points eBoak References Required a. Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per b. Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate c. Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not d. Determine the amount of net income that would appear on the 2018 income statement. (Round your answer to the nearest e. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. (Round your answer f. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. (Round your answer to the unit" to 2 decimal places.) calculations.) round intermediate calculations.) dollar amount.) to the nearest dollar amount.) nearest dollar amount.) a. Total product cost

Explanation / Answer

GIBSON MANUFACTURING COMPANY: Total Per Unit a) Product cost (4900 units) Raw material cost $          15,220 $              3.11 Wages to production personnel $          15,500 $              3.16 Depreciation of mfg equipment = (25500-3000)/3 = $            7,500 $              1.53 Product cost $          38,220 $              7.80 b) Cost of goods sold = 3960*$7.8 $          30,888 c) Ending inventory balance = 38220-30888 = $            7,332 d) Net Income: Sales revenue (3960*$15) $          59,400 Less: COGS $          30,888 Gross profit $          28,512 Less: Expenses: Salaries of administrative personnel 11200 Depreciation expense-Furniture (9800/8) 1225 $          12,425 Net income $          16,087 e) Amount of retained earnings $          16,087 f) Total assets = 78000+16087 = $          94,087

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.