Rooney Modems, Inc. makes modem cards that are used in notebook computers. The c

Question

Rooney Modems, Inc. makes modem cards that are used in notebook computers. The company completed the following transactions during 2017. All purchases and sales were made with cash. 1. Acquired $880,000 of cash from the owners.
2. Purchased $335,000 of manufacturing equipment. The equipment has a $43,000 salvage value and a four-year useful life. Label the purchase of the equipment as Event 2a and the recognition of depreciation as Event 2b.
3.The company started and completed 6,300 modems. Direct materials purchased and used amounted to $53 per unit.
4. Direct labor costs amounted to $38 per unit.
5. The cost of manufacturing supplies used amounted to $17 per unit.
6. The company paid $63,000 to rent the manufacturing facility.
7. Rooney sold all 6,300 units at a cash price of $185 per unit. Label the recognition of the sale as Event 7a and the cost of goods sold as Event 7b. (Hint: It will be necessary to determine the manufacturing costs in order to record the cost of goods sold.)
8. The sales staff was paid a $12.5 per unit sales commission.
9. Paid $52,000 to purchase equipment for administrative offices. The equipment was expected to have a $4,300 salvage value and a three-year useful life. Label the purchase of the equipment as Event 9a and the recognition of depreciation as Event 9b.
10. Administrative expenses consisting of office rental and salaries amounted to $78,450.

Required a. Record the transaction data for Rooney Modems, Inc. in the financial statements like the one shown below. The first transaction is recorded as an example. b-1. Use the following forms to prepare an income statement. b-2. Use the following forms to prepare an balance sheet. Required A |Required 81 Required B2 Record the transaction data for Rooney Modens, Inc. in the financial statements like the one shown below. The first transaction is recorded as an example. (Enter decrease to account balances with a minus sign. Round your answers to the nearest whole dollar amount.) ROONEY MODEMS, INC Assets Equity Income Statement Manut Office S Common Retained Cash + Exp.Net Inc 880,000 + 880,000 2a. 2b. 7b. 9a 10, Total Required ?

Explanation / Answer

A.

B-1.

B-2.

ROONEY MODEMS, INC. Event Number Assets = Equity Income Statement Cash + Inventory + Manuf. Equip. + Office Equip. = Common Stock + Retained Earnings Revenue - Expense = Net Income 1 880000 + + + = 880000 + - = 2a. -335000 + + 335000 + = + - = 2b. + 73000 + -73000 + = + - = 3 -333900 + 333900 + + = + - = 4 -239400 + 239400 + + = + - = 5 -107100 + 107100 + + = + - = 6 -63000 + 63000 + + = + - = 7a. 1165500 + + + = + 1165500 1165500 - = 1165500 7b. + -816400 + + = + -816400 - 816400 = -816400 8 -78750 + + + = + -78750 - 78750 = -78750 9a. -52000 + + + 52000 = + - = 9b. + + + -15900 = + -15900 - 15900 = -15900 10 -78450 + + + = + -78450 - 78450 = -78450 Total 757900 + 0 + 262000 + 36100 = 880000 + 176000 1165500 - 989500 = 176000

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