Homework SourseHelp me understand Explain how each part was solved and why
*Help me understand*
Explain how each part was solved
and why?
Campbell Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAF. 1. Acquired $58,000 cash by issuing common stock 2. Paid $7,500 for the materials used to make its products, all of which were started and completed during the year 3. Paid salaries of $4,300 to selling and administrative employees. 4. Paid wages of $6,600 to production workers. 5. Paid $5,800 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,400 estimated salvage value and a four-year useful life 6. Paid $13,300 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,600 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $25,200 that had cost $13,700 to make.Solution
Solution:
| Financial Statements Model | |||||||||||||||||
| Event | Assets | Equity | Income Statement | ||||||||||||||
| Cash | + | Inventory | + | Manuf. Equip. | + | Office Furn. | = | Common Stock | + | Ret. Ear. | + | Rev. | - | Exp. | = | Net Inc. | |
| 1 | $58,000.00 | + | + | + | = | $58,000.00 | + | + | - | = | |||||||
| 2 | -$7,500.00 | + | $7,500.00 | + | + | = | + | + | - | = | |||||||
| 3 | -$4,300.00 | + | + | + | = | + | -$4,300.00 | + | - | $4,300.00 | = | -$4,300.00 | |||||
| 4 | -$6,600.00 | + | $6,600.00 | + | + | = | + | + | - | = | |||||||
| 5a | -$5,800.00 | + | + | + | $5,800.00 | = | + | + | - | = | |||||||
| 5b | + | + | + | -$1,100.00 | = | + | -$1,100.00 | + | - | $1,100.00 | = | -$1,100.00 | |||||
| 6a | -$13,300.00 | + | + | $13,300.00 | + | = | + | + | - | = | |||||||
| 6b | + | + | -$3,900.00 | + | = | + | -$3,900.00 | + | - | $3,900.00 | = | -$3,900.00 | |||||
| 7a | $25,200.00 | + | + | + | = | + | $25,200.00 | + | $25,200.00 | - | = | $25,200.00 | |||||
| 7b | + | -$13,700.00 | + | + | = | + | -$13,700.00 | + | - | $13,700.00 | = | -$13,700.00 | |||||
| Total | $45,700.00 | + | $400.00 | + | $9,400.00 | + | $4,700.00 | = | $58,000.00 | + | $2,200.00 | + | $25,200.00 | - | $23,000.00 | = | $2,200.00 |
