Question

Rooney Manufacturing Company was started on January 1, 2018, when it acquired $79,000 cash by issuing common stock. Rooney immediately purchased office furniture and manufacturing equipment costing $7,700 and $33,300, respectively. The office furniture had an 8-year useful life and a zero salvage value. The manufacturing equipment had a $3,700 salvage value and an expected useful life of four years. The company paid $11,900 for salaries of administrative personnel and $15,600 for wages to production personnel. Finally, the company paid $11,440 for raw materials that were used to make inventory. All inventory was started and completed during the year. Rooney completed production on 4,200 units of product and sold 3,220 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.

Answer 1

Computation of Total cost of Product and Average Cost per Unit
Raw material Cost	$11,440
Wages of Production Personnel	$15,600
Depreciation on Manufacturing Equipment ($33300-$3700)4 year	$7,400
Total Cost of Product for 4220 unit	$34,440
Completion production Unit	4200
Average cost per unit	$8.20
( $34400/4200)
Computation of amount of cost of goods good sold
Raw material Cost	$11,440
Wages of Production Personnel	$15,600
Depreciation on Manufacturing Equipment ($33300-$3700)4 year	$7,400
Total Cost of Product for 4200 Unit	$34,440
Total Unit sold	3220
Cost of Goods Sold	$26,373
($34400/4200*3220)
Computation of amount of inventory Ending balance
Raw material Cost	$11,440
Wages of Production Personnel	$15,600
Depreciation on Manufacturing Equipment ($33300-$3700)4 year	$7,400
Total Cost of Product for 4200 Unit	$34,440
Total Unit produced	4200
Total Unit Sold	3220
Total Balance unit in stock	980
Value of Balance stock ( $34440/4200*980)	$8,036
Computation of net income apeear in Income statement
Sales revenue (3220*$15)	$48,300
Less: Cost of Goods Sold	$26,373
Gross Margin	$21,927
Less Salaries of administriave personnel	$11,900
Less: Deprecation for Office Furniture ( 7700/8)	$962.50
Net Income	$9,064.17