. ABC Company started year 1 with $165,000 in its cash and common stock accounts. During year 1, ABC paid $123,750 cash for employee compensation and $37,950 cash for materials.
| Required: |
| a. | Determine the total amount of assets and the amount of expense shown on the year 1 financial statements assuming ABC used the labor and materials to make 1,500 chairs. Further, assume that ABC sold 1,200 of the chairs it made. State the name(s) of the expense account(s) shown on the income statement |
| Total assets | |
| Total expenses | |
| Name of the expense | |
b. Determine the total amount of assets and the amount of expense shown on the year 1 financial statements assuming ABC used the labor and materials to provide dental cleaning services to 500 patients. State the name(s) of the expense account(s) shown on the income statement.
Total assets
Total expenses
Name of the expense
1
1
ABC company
| Total assets | 190200 |
| Total expenses | 40560 |
| Name of the expense | |
| Labour Expanses | 10200 |
| material | 30360 |
Working notes
| Beginig Cash | 165000 |
| Less: | |
| Labour Expanses | 12750 |
| material | 37950 |
| Cash At the end | 190200 |
| Total Expnases for 1500 chairs | Per Unit | |
| Labour Expanses | 12750 | 8.5 |
| material | 37950 | 25.3 |
| Total Expnases for chairs | ||
| Labour Expanses 1200 chairs | 10200 | |
| material for 1200 chairs | 30360 | |
| Total Expnases for chairs | 40560 |
(B)
| Total assets | 190200 |
| Total expenses | 50700 |
| Name of the expense | |
| Labour Expanses | 12750 |
| material | 37950 |
| Beginig Cash | 165000 |
| Less: | |
| Labour Expanses | 12750 |
| material | 37950 |
| Cash At the end | 190200 |
