Question

Baird Manufacturing Company was started on January 1, 2018, when it acquired $81,000 cash by issuing common stock. Baird immediately purchased office furniture and manufacturing equipment costing $9,800 and $24,900, respectively. The office furniture had an 8-year useful life and a zero salvage value. The manufacturing equipment had a $3,300 salvage value and an expected useful life of three years. The company paid $11,500 for salaries of administrative personnel and $15,800 for wages to production personnel. Finally, the company paid $16,360 for raw materials that were used to make inventory. All inventory was started and completed during the year. Baird completed production on 4,800 units of product and sold 3,880 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.) Required Determine the total product cost and the average cost per unit of the inventory produced in 2018. (Round "Average cost per unit" to 2 decimal places.) Determine the amount of cost of goods sold that would appear on the 2018 income statement. (Do not round intermediate calculations.) Determine the amount of the ending inventory balance that would appear on the December 31, 2018, balance sheet. (Do not round intermediate calculations.) Determine the amount of net income that would appear on the 2018 income statement. Determine the amount of retained earnings that would appear on the December 31, 2018, balance sheet. Determine the amount of total assets that would appear on the December 31, 2018, balance sheet. a. total product cost? average cost per unit? b. cost of good sold? c. ending inventory? d. net income? e. retained earning? f. total asset?

Answer 1

					Total Product cost	Average cost per unit
	Raw Materials				16360	3.41
	Wages				15800	3.29
	Total Direct costs				32160	6.7
	Add : Manufacturing Overhead
	Depreciation on manufacturing equipment				7200	1.5
	=(24900-3300)/3 years
Requirement a	Total Product Cost & Average cost per unit				39360	8.2
Requirement b	Cost of goods sold				31816
	=33960/4800*3880
Requirement c	Less : Ending Inventory of finished goods				7544
	=39360/4800*(4800-3880)
Requirement d	Net Income would be as follows
	Sales				58200
	Cost of goods sold				31816
	Gross Margin				26384
	Less : Administrative expenses
	Salary of administrative personnel				11500
	Depreciation on office furniture				1225
	=(9800/8 years)
	Net Income				13659
Requirement e	Since this is the first year of the company, the amount of retained earnings
	would be equal to their net income i.e.				13659
Requirement f	Total asset would consist of following
	Cash				60840
	Inventory				7544
	Fixed asset
	Manufacturing equipment				17700
	Office furniture				8575
	Total assets				94659