Answer:
Bergamo Bay's Computer System
a) Revised Trial Balance on December 31, 2017:
Debit Credit
Cash $32,000
Accounts receivable 44,000
Raw materials inventory 13,600
Work in process inventory 47,400
Finished goods inventory 9,000
Prepaid rent 3,000
Accounts payable $9,900
Notes payable 12,900
Common stock 30,000
Retained earnings 82,000
Sales 182,200
Cost of goods sold 102,000
Factory overhead 25,000
Operating expenses 41,000
Totals $317,000 $317,000
b) Balance Sheet as of December 31, 2017:
Assets:
Cash $32,000
Accounts receivable 44,000
Raw materials inventory 13,600
Work in process inventory 47,400
Finished goods inventory 9,000
Prepaid rent 3,000
$149,000
Accounts payable $9,900
Notes payable 12,900
Common stock 30,000
Retained earnings 96,200
$149,000
c) Income Statement for 2017:
Sales $182,200
less Cost of Goods Sold 102,000
less Factory Overhead 25,000 127,000
Gross Profit 55,200
Less Operating Expenses <u> 41,000</u>
Net Income 14,200
Explanation:
a) Prepared Trial Balance on December 31, 2017:
Debit Credit
Cash $66,000
Accounts receivable 44,000
Raw materials inventory 27,000
Work in process inventory 0
Finished goods inventory 9,000
Prepaid rent 3,000
Accounts payable $9,900
Notes payable 12,900
Common stock 30,000
Retained earnings 82,000
Sales 182,200
Cost of goods sold 102,000
Factory overhead 25,000
Operating expenses 41,000
Totals $317,000 $317,000
b) Raw Materials Inventory
As per Trial Balance $27,000
less Job 402 materials (4,300)
less Job 404 materials (7,300)
less indirect materials <u> (1,800)</u>
Adjusted Raw Materials Inventory $13,600
c) Work in Process:
As per Trial Balance $0
add Job 402 materials 4,300
add Job 404 materials 7,300
add indirect materials 1,800
add Job 402 labor 7,000
add Job 404 labor 5,000
add indirect labor 4,000
Work in Process Overhead <u>18,000</u>
Adjusted Work in Process $47,400
d) Cash Balance:
As per Trial Balance $66,000
Work in Process Labor (16,000)
Work in Process Overhead (18,000)
Adjusted Cash balance $32,000
e) Retained Earnings
Opening Balance $82,000
add Net Income 14,200
Ending Balance $96,200
