College Accounting: Week 7 Homework (E27-2A, P27-6A, Essay)

College Accounting

E27-2A Schedule of cost of goods manufactured
Prepare a schedule of cost of goods manufactured for Tomas Company for the year ended June 30, 20-2. Information to prepare the schedule is as follows:
Work in process, July 1, 20-1 6,400
Materials inventory, July 1, 20-1 4,875
Materials purchases 68,950
Direct labor 140,300
Actual factory overhead 85,225
Work in process, June 30, 20-2 7,700
Materials inventory, June 30, 20-2 6,950
Indirect materials charged to production 3,600

P27-6A Work sheet, adjusting entries, and financial statements
Herrera Company had the following trial balance columns on its work sheet.
Herrera Company
Trial Balance
December 31, 20—
Account Title Debit Balance Credit Balance
Cash 30,300
Government Notes 5,000
Interest Receivable -
Accounts Receivable 34,000
Allowance for Bad Debts 530
Finished Goods Inventory 24,000
Work in Process Inventory 9,000
Materials Inventory 8,500
Office-Supplies 3,100
Factory Supplies 3,800
Land 100,000
Factory Building 120,000
Accumulated Depreciation—Factory Building 10,000
Factory Equipment 40,000
Accumulated Depreciation—Factory Equipment 5,000
Interest Payable -
Accounts Payable 13,800
Income Tax Payable -
Bonds Payable 80,000
Capital Stock 50,000
Paid-In Capital in Excess of Par 30,000
Retained Earnings 92,400
Cash Dividends 30,000
Sales 405,100
Interest Revenue 300
Factory Overhead 78,630 89,300
Cost of Goods Sold 190,700
Wages Expense 70,000
Office Supplies Expense -
Bad Debt Expense -
Utilities Expense 4,400
Interest Expense 7,000
Income Tax Expense 18,000
$776,430 $776,430

Data for adjusting the accounts are as follows:
a. Factory overhead to be applied to work in process ending inventory 3,100
b. Interest receivable 75
c. Interest payable 600
d. Estimate of uncollectible accounts based on an aging of accounts receivable 2,930
e. Office supplies consumed 2,900
f. Factory supplies consumed 3,300
g. Factory building depreciation 5,000
h. Factory equipment depreciation 4,000
i. Over applied factory 1,470
j. Provision for corporate income taxes 6,100
k. Physical counts of the inventories agreed with the amounts in the books.

Additional information needed to prepare the financial statements is as follows:
Beginning inventories:
Finished goods January 1 18,000
Work in process, January 1 7,300
Materials inventory, January 1 9,500
Materials purchases for the year 51,500
Direct labor 60,000
Actual factory overhead 90,930
Indirect materials charged to production 3,400

1. Prepare a work sheet
2. Prepare the following financial statements and schedule:
a. Income statement
b. Schedule of cost of goods manufactured
c. Retained earnings statement
d. Balance sheet

Essay Question:
Please go to Chapter 23, review the purpose of the Statement of Cash Flows and write a short answer essay of at least 150 words analyzing how the change in cash and cash equivalents determine the effectiveness of cash flow management.
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