4.8 Patrick Lyell Manufacturing started the year with the following balances: $2
ID: 2342722 • Letter: 4
Question
4.8 Patrick Lyell Manufacturing started the year with the following balances: $200 Account Title Balance as of January 1, S Cash Inventory Manufacturing equipment Accounts payable Net worth 100,000 100,000 400,000 50,000 550,000 $100 $350 Transactions during the year were limited to the following: paid $100,000 for labor; pur- chased $150,000 worth of materials; noted equipment depreciation of $50,000, adding to inventory 300,000 units costing $1 to the manufacturer; sold 300,000 units for $2 each, cash; and purchased new equipment costing $200,000. $280Explanation / Answer
Answer
Cash
Material
Inventory
Manufacturing Equipment
Accounts Payable
Net Worth
Beginning Balance
$ 100,000.00
$ 100,000.00
$ 400,000.00
$ 50,000.00
$ 550,000.00
Labor paid
$ (100,000.00)
$ (100,000.00)
Material Purchased
$ (150,000.00)
$ 150,000.00
Depreciation
$ (50,000.00)
$ (50,000.00)
Inventory
$ 300,000.00
Sales
$ 600,000.00
$ (300,000.00)
$ 600,000.00
Equipment purchased
$ (200,000.00)
$ 200,000.00
Ending Balance
$ 250,000.00
$ 150,000.00
$ 100,000.00
$ 550,000.00
$ 50,000.00
$ 1,000,000.00
For the year ended 31 December
Revenue:
Sales revenue
$ 600,000.00
Expenses:
Labor expenses - Wages expenses
$ 100,000.00
Depreciation expenses
$ 50,000.00
Total Expenses
$ 150,000.00
Net Income
$ 450,000.00
At Dec 31
ASSETS
Cash
$ 250,000.00
Material
$ 150,000.00
Inventory
$ 100,000.00
Manufacturing Equipment
$ 550,000.00
Total Assets
$ 1,050,000.00
LIABILITIES
Accounts Payable
$ 50,000.00
STOCKHOLDER's EQUITY
Net Worth Beginning Balance
$ 550,000.00
Add: Net Income
$ 450,000.00
Total Net Worth or Stockholder's Equity
$ 1,000,000.00
Total Liabilities & Equity
$ 1,050,000.00
Cash
Material
Inventory
Manufacturing Equipment
Accounts Payable
Net Worth
Beginning Balance
$ 100,000.00
$ 100,000.00
$ 400,000.00
$ 50,000.00
$ 550,000.00
Labor paid
$ (100,000.00)
$ (100,000.00)
Material Purchased
$ (150,000.00)
$ 150,000.00
Depreciation
$ (50,000.00)
$ (50,000.00)
Inventory
$ 300,000.00
Sales
$ 600,000.00
$ (300,000.00)
$ 600,000.00
Equipment purchased
$ (200,000.00)
$ 200,000.00
Ending Balance
$ 250,000.00
$ 150,000.00
$ 100,000.00
$ 550,000.00
$ 50,000.00
$ 1,000,000.00
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