Question

Problem 11-18A Manufacturing cost flow for monthly and annual accounting periods LO 11-1, 11-2, 11-3

Evelyn Rundle started Rundle Manufacturing Company to make a universal television remote control device that she had invented. The company’s labor force consisted of part-time employees. The following accounting events affected Rundle Manufacturing Company during its first year of operation. (Assume that all transactions are cash transactions unless otherwise stated.)

Transactions for January 2018, First Month of Operation

1 Issued common stock for $10,000.

2 Purchased $430 of direct raw materials and $60 of production supplies.

3 Used $260 of direct raw materials.

4 Used 80 direct labor hours; production workers were paid $9.50 per hour.

5 Expected total overhead costs for the year to be $3,200, and direct labor hours used during the year to be 1,000. Calculate an overhead rate and apply the appropriate amount of overhead costs to Work in Process Inventory.

6 Paid $143 for salaries to administrative and sales staff.

7 Paid $23 for indirect manufacturing labor.

8 Paid $205 for rent and utilities on the manufacturing facilities.

9 Started and completed 100 remote controls during the month; all costs were transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

10 Sold 70 remote controls at a price of $21.4 each.

Transactions for Remainder of 2018

11 Acquired an additional $18,500 by issuing common stock.

12 Purchased $3,900 of direct raw materials and $905 of production supplies.

13 Used $3,000 of direct raw materials.

14 Paid production workers $9.50 per hour for 890 hours of work.

15 Applied the appropriate overhead cost to Work in Process Inventory.

16 Paid $1,554 for salaries of administrative and sales staff.

17 Paid $239 of indirect manufacturing labor cost.

18 Paid $2,410 for rental and utility costs on the manufacturing facilities.

19 Transferred 900 additional remote controls that cost $12.76 each from the Work in Process Inventory account to the Finished Goods Inventory account.

20 Determined that $167 of production supplies was on hand at the end of the accounting period.

21 Sold 860 remote controls for $21.40 each.

22 Determine whether the overhead is over- or underapplied. Close the Manufacturing Overhead account to the Cost of Goods Sold account.

23 Close the revenue and expense accounts.

Required

For each of the above transactions, post the effects to the appropriate T-accounts.

Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2018.

Complete this question by entering your answers in the tabs below.

For each of the above transactions, post the effects to the appropriate T-accounts. (Do not round intermediate calculations.)

	Cash Common Stock End. bal. End. bal. Raw Materials Retained Earnings End. bal. End. bal. Manufacturing Overhead Sales Revenue End. bal. 0 0 End. bal. 0 0 Work in Process Cost of Goods Sold End. bal. 0 0 End. bal. Finished Goods Selling and Administrative Expenses End. bal. End. bal. 0 0 Production Supplies End. bal.

	RUNDLE MANUFACTURING COMPANY Cost of Goods Manufactured and Sold For the Year, 2018 Raw materials available 0 Raw materials used 0 Total manufacturing costs 0 Total work in process inventory 0 Cost of goods manufactured 0 Goods available for sale 0 Cost of goods sold $0

Prepare an income statement for 2018. (Do not round intermediate calculations.)

Do not round intermediate calculations.

	RUNDLE MANUFACTURING COMPANY Income Statements For the Year, 2018 0 $0

·       Req B CGM Sched

	RUNDLE MANUFACTURING COMPANY Balance Sheets At the year ended 2018 Assets Total assets $0 Equity Total equity $0

Answer 1

Cash					Common Stock
		Dr	Cr				Dr	Cr
Jan-18	To Common Stock	10000			Jan-18	By Cash		10000
Jan-18	By raw materials		430		Dec-18	By Cash		18500
Jan-18	By prod. Supplies		60		End. bal.			28500
Jan-18	By labour		760
Jan-18	By salaries sales staff		143
Jan-18	To Indirect labor		23
Jan-18	To rent		205
Jan-18	Receipts from sales	1498
Jan-18	By balance c/f		9877
Jan-18	Total	11498	11498
Feb-18	To balance b/f	9877
Dec-18	To Common Stock	18500
Dec-18	By raw materials		3900
Dec-18	By prod. Supplies		905
Dec-18	By labour		8455
Dec-18	By salaries sales staff		1554
Dec-18	To Indirect labor		239
Dec-18	To rent		2410
Dec-18	Receipts from sales	18404
Dec-18	End Balance		29318
	Total	46781	17463
Raw Materials					Retained Earnings
Jan-18	To Cash	430
Jan-18	By WIP		260
Jan-18	End. bal.		170
		430	430		End. bal.
Feb-18	To Op. Bal	170
Dec-18	To Cash	3900
Jan-18	By WIP		3000
Jan-18	End. bal.		1070
		4070	4070
Manufacturing Overhead					Sales Revenue
					Jan-18	By Sales		1498
Jan-18	To Cash - Indirect labor	23			Jan-18	End. Bal		1498
Jan-18	To Cash - rent	205			Dec-18	By Sales		18404
Jan-18	End bal	228			End. bal.	0	0	19902
Dec-18	To Cash - Indirect labor	239
Dec-18	To Cash - rent	2410
Dec-18	End bal	2649
Work in Process					Cost of Goods Sold
Jan-18	To Materials	260			Jan-18	To WIP	1020
Jan-18	To Labour	760			Jan-18	To Manufacturing Overheads	228
	($9.50 x 80)				Jan-18	To Production Supplies	60
Jan-18	End bal	1020
Dec-18	To Materials	3000			End. bal.		1308
Dec-18	To Labour	8455			Jan-18	To Finished Goods		1308
	($9.50 x 890)				Dec-18	To WIP	11455
Dec-18	End bal	11455			Dec-18	To Manufacturing Overheads	2649
					Dec-18	To Production Supplies	738
					End. bal.		14842
					Dec-18	To WIP		14842
								16150
End. bal.
Finished Goods				Selling and Administrative Expenses
Jan-18	To Cost of Goods sold	1308
Jan-18	Sales		916
Dec-18	To Cost of Goods sold	14842		Jan-18	To Cash -salaries	143
Dec-18	Sales		10974	Dec-18	To Cash -salaries	1554
End. bal.			4260	End. bal.	0	1697
		16150	16150
Production Supplies
Jan-18	To Cash -purchases	60
Jan-18	End. bal.	60
Dec-18	To Cash -purchases	905
Dec-18	On hand		167
Dec-18	Utilised	738
RUNDLE MANUFACTURING COMPANY
Income Statements
For the Year, 2018
Sales	19902
Less
Cost of Goods sold	-16150
Selling & Admin expenses	-1697
Profit	2055
	$0
RUNDLE MANUFACTURING COMPANY
Balance Sheets
At the year ended 2018
Assets
Cash	29318
Raw Materials	1070
Prod supplies	167
Total assets	30555
Equity	28500
Profit	2055
Total equity	30555