Chapter 14: Q21DQ (page 655)
Prepare a proper title for the annual schedule of cost of goods manufactured of Google. Does the date match the balance sheet or income statement? Why?
The date matches the period of the income statement.
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How do an income statement and a balance sheet for a manufacturing company and a merchandising company differ?
Listed here are product costs for the production of soccer balls. Classify each cost (a) as either variable (V) or fixed (F) and (b) as either direct (D) or indirect (I). What patterns do you see regarding the relation between costs classified in these two ways?
Product cost | a. Variable or fixed | b. Direct or indirect |
1. Leather cover for soccer balls | ||
2. Annual flat fee paid for office security | ||
3. Coolants for machinery | ||
4. Wages of assembly workers | ||
5. Lace to hold leather together | ||
6. Taxes on factory | ||
7. Machinery depreciation (Straight-line) |
Question: Identify whether each description most likely applies to managerial (M) or financial (F) accounting.
Using the data from Problem 14-2A and the following additional inventory information for Leone Company, complete the requirements below. Assume income tax expense is \(233,725 for the year.
Inventories | |
Raw material, December 31, 2016 | \)166,850 |
Raw materials, December 31, 2017 | 182,000 |
Work in process, December 31, 2016 | 15,700 |
Work in process, December 31, 2017 | 19,380 |
Finished goods, December 31, 2016 | 167,350 |
Finished goods, December 31, 2017 | 136,490 |
Required
1. Prepare the company’s 2017 schedule of cost of goods manufactured.
2. Prepare the company’s 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.
Analysis Component
3. Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and (b) days’ sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for both its raw materials inventory and its finished goods inventory. (To compute turnover and days’ sales in inventory for raw materials, use raw materials used rather than cost of goods sold.) Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.
The triple bottom line includes what three main dimensions?
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