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The following calendar year-end information is tak...

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Question

The following calendar year-end information is taken from the December 31, 2005, adjusted trial balance and other records of Plaza Company. Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . $ 30,750 Depreciation expense?Office equipment . . . . . . . . . 9,250 Depreciation expense?Selling equipment . . . . . . . . . 10,600 Depreciation expense?Factory equipment . . . . . . . . 35,550 Factory supervision . . . . . . . . . . . . . . . . . . . . . . . . . 104,600 Factory supplies used . . . . . . . . . . . . . . . . . . . . . . . 9,350 Factory utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000 Inventories Raw materials, December 31, 2004 . . . . . . . . . . . . 168,850 Raw materials, December 31, 2005 . . . . . . . . . . . . 184,000 Goods in process, December 31, 2004 . . . . . . . . . 17,700 Goods in process, December 31, 2005 . . . . . . . . . 21,380 Finished goods, December 31, 2004 . . . . . . . . . . . 169,350 Finished goods, December 31, 2005 . . . . . . . . . . . 138,490 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 677,480 Income taxes expense . . . . . . . . . . . . . . . . . . . . . . . 235,725 Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,875 Miscellaneous production costs . . . . . . . . . . . . . . . . 10,425 Office salaries expense . . . . . . . . . . . . . . . . . . . . . . 65,000 Raw materials purchases . . . . . . . . . . . . . . . . . . . . . 927,000 Rent expense?Office space . . . . . . . . . . . . . . . . . . 24,000 Rent expense?Selling space . . . . . . . . . . . . . . . . . . 28,100 Rent expense?Factory building . . . . . . . . . . . . . . . 78,800 Maintenance expense?Factory equipment . . . . . . . . 37,400 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,527,000 Sales discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,500 Sales salaries expense . . . . . . . . . . . . . . . . . . . . . . . 394,560 1. Prepare the company?s 2005 manufacturing statement. 2. Prepare the company?s 2005 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses. 3. 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.,Thank you

 

Paper#4324 | Written in 18-Jul-2015

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