Manufacturing Statement
6. The Marine Equipment Co., a corporation, manufactures metal boats and deals in marine supplies. A trial balance of the general ledger, December 31, 1917, is given below:
| Land | $ 20,000.00 | |
| Buildings | 50,000.00 | |
| Machinery and Tools | 40,000.00 | |
| Automobile Trucks | 5,000.00 | |
| Patents | 7,000.00 | |
| Office Furniture and Fixtures. | 700.00 | |
| Accounts Receivable | 19,000.00 | |
| Notes Receivable | 10,700.00 | |
| Notes Receivable Discounted | $ 6,000.00 | |
| Raw Materials Inventory, January 1, 1917 | 20,000.00 | |
| Goods in Process Inventory, January 1, 1917 | 5,000.00 | |
| Metal Boats Finished Inventory, January 1, 1917 | 8,000.00 | |
| Marine Supplies Inventory, January 1, 1917 | 12,000.00 | |
| Union National Bank | 8,740.00 | |
| Capital Stock | 100,000.00 | |
| Surplus | 18,000.00 | |
| Treasury Stock | 10,000.00 | |
| Bonds Payable, 5% First Mortgage | 40,000.00 | |
| Reserve for Depreciation, Buildings | 1,200.00 | |
| Reserve for Depreciation, Machinery and Tools | 1,000.00 | |
| Reserve for Depreciation, Automobile Trucks | 200.00 | |
| Notes Payable | 2,000.00 | |
| Accounts Payable | 24,000.00 | |
| Purchases, Raw Material | 40,000.00 | |
| Purchases, Marine Supplies | 30,000.00 | |
| Freight Inward, Raw Materials | 2,450.00 | |
| Freight Inward, Marine Supplies | 1,340.00 | |
| Freight and Cartage Outward | 824.00 | |
| Sales, Metal Boats | 131,130.00 | |
| Sales, Marine Supplies | 58,960.00 | |
| Productive Labor | 32,400.00 | |
| Non-Productive Labor | 15,230.00 | |
| Superintendence | 3,420.00 | |
| Heat, Light, and Power | 8,500.00 | |
| Shop Supplies | 2,490.00 | |
| Miscellaneous Factory Expense | 1,300.00 | |
| Insurance | 300.00 | |
| Repairs to Machinery and Tools | 2,146.00 | |
| Taxes | 400.00 | |
| Advertising | 3,420.00 | |
| Returned Sales and Allowances, Metal Boats | 1,200.00 | |
| Returned Sales and Allowances, Marine Supplies | 862.00 | |
| Discount on Sales | 3,710.00 | |
| Discount on Purchases | 5,071.00 | |
| Salesmen’s Salaries | 6,570.00 | |
| Salesmen’s Traveling Expenses | 2,354.00 | |
| Advances to Salesmen | 450.00 | |
| Office Salaries | 8,630.00 | |
| Legal Expense | 540.00 | |
| Stationery and Printing | 1,200.00 | |
| Postage | 190.00 | |
| Interest | 315.00 | |
| Miscellaneous Selling Expense | 1,180.00 | |
| $387,561.00 | $387,561.00 |
Additional information to be considered:
| Inventories, December 31, 1917: | |
| Raw Materials | $21,000.00 |
| Goods in Process | 7,000.00 |
| Metal Boats Finished | 13,000.00 |
| Marine Supplies | 8,000.00 |
| Accrued Items: | |
| Interest on Bonds Payable, 1 year at 5% | $2,000.00 |
| Interest on Notes Payable | 40.00 |
| Interest on Notes Receivable | 75.00 |
| Taxes (estimated) | 100.00 |
Unexpired insurance $100.
Provide for Reserve for depreciation on: buildings, 5% on original value; machinery and tools, 10% on diminishing value; automobile trucks, 20% on diminishing value. Also provide a 2% reserve for bad debts. Write off depreciation of 10% on the original cost of furniture and fixtures. Patents expire 14 years from January 1, 1917. One-half of advertising is to be carried to the next period.
Distribute as follows:
| Item | Mfg. | Selling | P. L. |
| Insurance | ¾ | ¼ | 0 |
| Depreciation Auto Trucks | ½ | ½ | 0 |
| Taxes | ¾ | 0 | ¼ |
From the trial balance and the additional information prepare:
- (a) Income statement.
- (b) Balance sheet.
- (c) Journal entries to record the additional information
- and close the ledger.