Part1 Part2 R&D; Costs Halpern Company\'s controller prepared the following inco

Question

Part1 Part2 R&D; Costs Halpern Company's controller prepared the following income statement and balance sheet at the end of the first year of the company's exstence Income Statement Sales revenue Cost of sales Operating expenses Net income 40,000 20,000 1200 Balance Shoot 33,000 Accounts payable 24,000 Notes payable 30,000 Common stock 20,000 S 5,000 40,000 50,000 12,000 Cash R&D; cots Property, plant, and equipment (net Retained eamings Investigation shows that R&D; costs include, among others, $8,000 of operating costs because the company is not yet operating at capacity. In addition, R&D; costs inckude $5,000 of materials that were wasted durning early production because "our employees made some unnecessary mistakes.

Explanation / Answer

Income Statement $ Sales Revenue            40,000 Cost of Sales            20,000 Gross Profit            20,000 Operating Expenses              8,000 Operating Revenue            12,000 Net Revenue            12,000 Balance Sheet $ Cash            33,000 Inventory            24,000 Total Current Assets            57,000 R & D Cost            30,000 Property Plant and Equipment            20,000 Total Assets          107,000 Accounts Payable              5,000 Notes Payable            40,000 Total Liabilities            45,000 Common Stock            50,000 Retained Earnings            12,000 Total Shareholder's Equity            62,000 Total Liabilities and Shareholder's Equity          107,000

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