Exam 27: Manufacturing Accounting: The Work Sheet and Financial Statements

In a perpetual inventory system, costs of goods sold are accumulated in the cost of goods sold account as sales occur during the year.

Santiago Company has provided data for the year-end adjustments as follows: Factory overhead to be applied to work in process ending inventory \ 14,687 Interest receivable 1,554 Office supplies used 5,807 Factory supplies used 8,611 Provision for uncollectible accounts (based on percentage of sales) 11,734 Insurance expired on factory buil ding and equipment 2,734 Depreciation on factory building 16,490 Depreciation on factory equipment 6,608 ​ Required: Prepare the year-end adjusting entries in general journal form.

Which of the following accounts is not closed at the end of the accounting period?

From the data below for the Sorta Company, prepare the closing entries for the year ended December 31, 20--. Cash dividends \ 105,000 Sales 987,000 Sales returns and allowances 5,200 Interest revenue 3,700 Factory overhead (debit) 205,300 Factory overhead (credit) 205,300 Cost of goods sold 674,200 Wages expense 112,000 Supplies expense 5,300 Depreciation expense-office equipment 4,200 Utilities expense 5,700 Bad debt expense 1,300 Advertising expense 6,300 Interest expense 4,700 Income tax expense 61,950

Manufacturing companies will include three inventory accounts in the liability section of the balance sheet.

The amount of interest due on notes and bonds payable owed by the company is adjusted by

All of the data for the income statement is obtained from the Income Statement columns of the work sheet.

If the estimated amount of uncollectible accounts at the end of the year (based on the aging method) was $3,675.32 and Allowance for Bad Debts had a credit balance of $860, the necessary adjustment would include

Factory supplies used during the year is adjusted by

The adjusting entry to apply factory overhead to the work in process ending inventory includes

The difference between the debits and credits for each pair of columns in the Income Statement and Balance Sheet sections of the work sheet represents net income or net loss.

The depreciation of factory equipment is adjusted by

Which of the following statements is NOT true of manufacturing company accounting?

All of the data for the statement of retained earnings is taken from the Balance Sheet columns of the work sheet.

The estimated amount of uncollectible accounts is adjusted on the work sheet by debiting Allowance for Bad Debts and crediting Bad Debt Expense.

The supplementary schedule of cost of goods sold is unique to a manufacturing company.

Factory overhead is applied at a predetermined rate when a job is completed.

Factory Overhead has a zero balance after all adjustments, so it is not necessary to close the account at the end of the accounting period.

The adjustment for corporate income tax should be reversed.

Manufacturing company and merchandising company work sheets are prepared using the same five steps.