College Accounting: Chapter 27 Mastery Problem - Reese Manufacturing Company manufactures

College Accounting
Chapter 27 Mastery Problem
Reese Manufacturing Company manufactures and sells a limited line of products made to customer order. The company uses a perpetual inventory system and keeps its accounts on a calendar year basis. A 10-column work sheet is presented on page 1086.
Reese Manufacturing Company
Worksheet
For Year Ended December 31, 20--
Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 49,423 49,423 49,423
Accounts receivable 78,096 78,096 78,096
Allowance for bad debts 5,074 g 956 6,030 6,030
Finished goods inventory 42,675 42,675 42,675
Work in process inventory 39,675 i 1,567 41,242 41,242
Materials inventory 22,353 22,353 22,353
Office supplies 3,546 b 800 2,746 2,746
Factory supplies 1,878 c 1,389 489 489
Prepaid insurance 1,500 f 1,454 46 46
Factory equipment 186,674 186,674 186,674
Accum Depr - Factory equipment 23,501 e 12,553 36,054 36,054
Office Equipment 46,986 46,986 46,986
Accum Depr - Office equipment 2,916 d 923 3,839 3,839
Notes payable 12,470 12,470 12,470
Interest payable a 132 132 132
Accounts payable 10,356 10,356 10,356
Income tax payable h 45,725 45,725 45,725
Capital stock 72,000 72,000 72,000
Retained earnings 195,341 195,341 195,341
Cash dividends 36,000 36,000 36,000
Sales 532,027 532,027 532,027
Factory overhead 52,356 65,446 c 1,389 i 1,567 67,654 67,654
e 12,553 j 641
f 1,356
Cost of goods sold 281,407 j 641 282,048 282,048
Wages expense 58,380 58,380 58,380
Advertising expense 11,450 11,450 11,450
Office rent expense 5,443 5,443 5,443
Office supplies expense b 800 800 800
Bad debt expense g 956 956 956
Depr Exp - Factory Equipment f 98 98 98
Depr Exp - Office Equipment d 923 923 923
Interest expense 1,289 a 132 1,421 1,421
Income tax expense h 45,725 45,725 45,725
$919,131 $919,131 $66,140 $66,140 $981,628 $981,628 407,244 532,027 506,730 381,947
Net income 124,783 124,783
$532,027 $532,027 $506,730 $506,730

Additional information needed to prepare the income statement and schedule of cost of goods manufactured is as follows:
Finished goods inventory, January 1 85,454
Materials inventory, January 1 11,633
Purchases for the year 96,437
Direct labor 107,740
Work in process inventory, January 1 22,600
Indirect materials charged to production 3,200

REQUIRED
1. Prepare an income statement and schedule of cost of goods manufactured for the year ended December 31, 20--.
2. Prepare a retained earnings statement for the year ended December 31, 20--.
3. Prepare a balance sheet as of December 31, 20--.
4. Prepare the adjusting, closing, and reversing entries.
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