Exercise 1114A Product cost flow and financial statements LO

Exercise 11-14A Product cost flow and financial statements LO 11-1, 11-2, 11-3 Rooney Manufacturing Company was started on January 1,2018. The company was affected by the following events during its first year of operation: 1. Acquired $2,100 cash from the issue of common stock 2. Paid $540 cash for direct raw materials. 3. Transferred $390 of direct raw materials to work in process. 4. Paid production employees $670 cash. 5. Paid $330 cash for manufacturing overhead costs. 6. Applied $230 of manufacturing overhead costs to work in process. 7. Completed work on products that cost $1,060. 8. Sold products that cost $830 for $1,580 cash. 9. Paid $400 cash for selling and administrative expenses 0. Made a $80 cash distribution to the owners. 11. Closed the Manufacturing Overhead account.

Solution

a Event Assets Equity Cash Maufacturing Overhead Raw Materials Work in process Finished Goods Common Stock Retained Earnings Revenue Expense Net Income 1 2100 2100 2 -540 540 3 -390 390 4 -670 670 5 -330 330 6 -230 230 7 -1060 1060 8 1580 -830 1580 830 750 9 -400 400 350 10 -80 80 11 -100 100 b Schedule of Cost of Goods Manufactured and Sold Raw Materials 390 Wages 670 Manufacturing Overhead 230 Total Cost 1290 Cost of goods sold 830 Balance of Work in process 460 Raw materials available 540 Raw materials available rials used 390 Total manufacturing costs 1290 Total work in process inventory 460 Cost of goods manufactured 1060 Cost of goods available for sale 1060 Cost of goods sold 830