The following information is available for two different types of businesses for the Year 1 accounting year. Hopkins CPAs is a s
ervice business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students.
Data for Hopkins CPAs
Borrowed $90,000 from the bank to start the business.
Provided $60,000 of services to clients and collected $50,000 cash.
Paid salary expense of $32,000.
Data for Sports Clothing
Borrowed $90,000 from the bank to start the business.
Purchased $60,000 inventory for cash.
Inventory costing $26,000 was sold for $50,000 cash.
Paid $8,000 cash for operating expenses.
Required
Prepare an income statement, balance sheet, and statement of cash flows for each of the companies (Statement of Cash Flows only, items to be deducted must be indicated with a negative amount.)
Data for Hopkins CPAs
Borrowed $90,000 from the bank to start the business.
Provided $60,000 of services to clients and collected $50,000 cash.
Paid salary expense of $32,000.
Data for Sports Clothing
Borrowed $90,000 from the bank to start the business.
Purchased $60,000 inventory for cash.
Inventory costing $26,000 was sold for $50,000 cash.
Paid $8,000 cash for operating expenses.
Required
Prepare an income statement, balance sheet, and statement of cash flows for each of the companies (Statement of Cash Flows only, items to be deducted must be indicated with a negative amount.)
1 answer:
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Solution:
Single factory overhead amount: the amount at which plant overheads or processing overheads are assigned to goods is referred to as single plant overhead rate.
Formula to measure a single plant-wide overhead rate:
Single plant-wide overhead rate :
Different development team overhead rate: this distribution system describes the various divisions engaged in the manufacturing cycle. Factory overheads are assigned to goods on the basis of the overhead cost for each of the manufacturing units.
Formula for calculating various output department overhead:
Multiple production department overhead rate:
For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.
Using DLH as the allocation basis to measure a single plant-wide overhead limit.
Single plant-wide overhead rate :
=
For calculate: single plant-wide overhead rate use direct working hours (DLH) as the allocation basis, and measure factory overhead.
Using DLH as the allocation basis to measure a single plant-wide overhead limit.