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Plaza Company - Manufacturing and income statements; inventory analysis - 11 Sep, 2012

14-8A Manufacturing and income statements; inventory analysis

The following calendar year-end information is taken from the December 31, 2011, adjusted trial balance and other records of Plaza Company.

 

Advertising expense

             30,750

Direct labor

            677,480

Depreciation expense - Office equipment

9,250

Incomes taxes expense

235,725

Depreciation expense -Selling equipment

10,600

Indirect labor

58,875

Depreciation expense-Factory equipment

35,550

Miscellaneous production costs

10,425

Factory supervision

104,600

Office salaries expense

65,000

Factory supplies used

9,350

Raw materials purchases

927,000

Factory utilities

35,000

Rent expense - Office space

24,000

Rent expense - Selling space

28,100

Raw materials, December 31, 2010

168,850

Rent expense -Factory building

78,800

Raw materials, December 31, 2011

184,000

Maintenance expense -Factory equipment

37,400

Goods in process, December 31, 2010

17,700

Sales

4,527,000

Goods in process, December 31, 2011

21,380

Sales discounts

64,500

Finished goods, December 31, 2010

169,350

Sales salaries expense

394,560

Finished goods, December 31, 2011

138,490

           

Required

 

Prepare the company's 2011 manufacturing statement.

Prepare the company's 2011 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.

 

Analysis Component

 

Compute the (a) inventory turnover, defined as cost of goods sold divided by average inventory, and (b) days' sales in inventory, defined as 365 times ending inventory divided by cost of goods sold, for both its raw materials inventory and its finished goods inventory. (To compute turnover and days' sales in inventory for raw materials, use raw materials used rather than cost of goods sold.) Discuss some possible reasons for differences between these ratios for the two types of inventories. Round answers to one decimal place.



Category : Cost Accounting

Search Keywords :
Plaza , Manuafcturing , Income , Statement , Inventory , Analysis , Turnover , Ratios 


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Answer  - 11 Sep, 2012
Please see the excel attachment....


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