The accounting records for Eisner Manufacturing Company included the following cost information relating to its first year of operations: Direct materials Direct labor Fixed manufacturing overhead Variable manufacturing overhead $ 60,000 $ 80,000 100,000 $ 20,000 Assume the company produced 10,000 units of inventory and sold 6,000 of these units for $192,000. What amount of finished goods will be reported on the balance sheet at the end of the year under absorption costing? Under variable costing? A. $104,000, $64,000 B. $64,000, $104,000 C. $130,667, $64,000 D. $64,000, $130,667 Solution Calculate unit product cost and finished goods : So answer is a) $104000 ; $64000AbsorptionvariableDirect material66Direct labour88Variable manufacturing overhead22Fixed manufacturing overhead100Unit product cost2616Finished goods inventory40004000Finished goods inventory cost10400064000.

1. The adjusted trial balance for Tybalt Construction as of December 31, 2017, follows.
O. Tybalt invested $8,000 cash in the business during year 2017 (the December 31, 2016, credit
balance of the O. Tybalt, Capital account was $123,300). Tybalt Construction is required to
make a $6,500 payment on its long-term notes payable during 2018.
Required:
1a. Prepare the income statement for the calendar-year 2017.
1b. Prepare the statement of owner's equity for the calendar-year 2017.
1c. Prepare the classified balance sheet at December 31, 2017.
2. Prepare the necessary closing entries at December 31, 2017.
3. Use the information in the financial statements to compute the following ratios:
TYBALT CONSTRUCTION
Adjusted Trial Balance
December 31, 2017No.Account Title Debit Credit 101Cash $ 8,000104Short-term
investments22,500126Supplies9,100128Prepaid
insurance8,800167Equipment50,000168Accumulated
depreciation—Equipment$25,000173Building177,000174Accumulated
depreciation—Building59,000183Land54,420201Accounts payable17,500203Interest
payable2,600208Rent payable3,000210Wages payable2,300213Property taxes
payable900233Unearned professional fees7,800251Long-term notes payable67,000301O.
Tybalt, Capital131,300302O. Tybalt, Withdrawals12,300401Professional fees
earned103,000406Rent earned17,500407Dividends earned2,100409Interest
earned2,300606Depreciation expense—Building12,980612Depreciation
expense—Equipment7,500623Wages expense31,000633Interest expense3,400637Insurance
expense7,600640Rent expense10,100652Supplies expense6,100682Postage
expense2,900683Property taxes expense4,700684Repairs expense7,200688Telephone
expense2,400690Utilities expense3,300Totals$441,300$441,300
Solution
Answers
Revenues:
Professional fees earned
$ 1,03,000.00
Rent earned

2. $ 17,500.00
Dividends earned
$ 2,100.00
Interest earned
$ 2,300.00
Total revenues
$ 1,24,900.00
Expenses:
Depreciation expense—Building
$ 12,980.00
Depreciation expense—Equipment
$ 7,500.00
Wages expense
$ 31,000.00
Interest expense
$ 3,400.00
Insurance expense
$ 7,600.00
Rent expense
$ 10,100.00
Supplies expense
$ 6,100.00
Postage expense
$ 2,900.00
Property taxes expense
$ 4,700.00
Repairs expense
$ 7,200.00
Telephone expense
$ 2,400.00
Utilities expense
$ 3,300.00
Total Expenses
$ 99,180.00
Net Income
$ 25,720.00

3. Statement of Owner’s Equity
O. Tybalt, Capital - Beginning Balance
$ 1,23,300.00
Add: Net Income
$ 25,720.00
Add: Capital Invested
$ 8,000.00
Less: O. Tybalt, Withdrawals
$ 12,300.00
O. Tybalt, Capital - Ending Balance
$ 1,44,720.00
ASSETS
Current Assets:
Cash
$ 8,000.00
Short-term investments
$ 22,500.00
Supplies
$ 9,100.00
Prepaid insurance
$ 8,800.00
Total Current Assets
$ 48,400.00
Plant, Property & Equipment
Equipment
$ 50,000.00
Accumulated depreciation—Equipment
$ (25,000.00)
$ 25,000.00
Building
$ 1,77,000.00
Accumulated depreciation—Building
$ (59,000.00)
$ 1,18,000.00

4. Land
$ 54,420.00
Total Plant, property & Equipment
$ 1,97,420.00
Total ASSETS
$ 2,45,820.00
LIABILITIES
Current Liabilities
Accounts payable
$ 17,500.00
Interest payable
$ 2,600.00
Rent payable
$ 3,000.00
Wages payable
$ 2,300.00
Property taxes payable
$ 900.00
Unearned professional fees
$ 7,800.00
Notes payable (due in 2018)
$ 6,500.00
Total Current Liabilities
$ 40,600.00
Other Liabilities
Long-term notes payable [total $ 67,000 - $6500 short term due in 2018 = $ 60,500]
$ 60,500.00
Total LIABILITIES
$ 1,01,100.00
OWNERS' EQUITY
O. Tybalt, Capital - Ending Balance
$ 1,44,720.00
Total LIABILITIES & EQUITY
$ 2,45,820.00
Date

5. Accounts title
Debit
Credit
31-Dec-17
Professional fees earned
$ 1,03,000.00
Rent earned
$ 17,500.00
Dividends earned
$ 2,100.00
Interest earned
$ 2,300.00
Income Summary
$ 1,24,900.00
(revenue accounts closed)
31-Dec-17
Income Summary
$ 99,180.00
Depreciation expense—Building
$ 12,980.00
Depreciation expense—Equipment
$ 7,500.00
Wages expense
$ 31,000.00
Interest expense
$ 3,400.00
Insurance expense
$ 7,600.00
Rent expense
$ 10,100.00
Supplies expense
$ 6,100.00
Postage expense
$ 2,900.00
Property taxes expense
$ 4,700.00

6. Repairs expense
$ 7,200.00
Telephone expense
$ 2,400.00
Utilities expense
$ 3,300.00
(expense account closed)
31-Dec-17
Income Summary
$ 25,720.00
O. Tybalt, Capital
$ 25,720.00
(Net Income transferred)
31-Dec-17
O. Tybalt, Capital
$ 12,300.00
O. Tybalt, Withdrawals
$ 12,300.00
(Drawings account closed)
Revenues:
Professional fees earned
$ 1,03,000.00
Rent earned
$ 17,500.00
Dividends earned
$ 2,100.00
Interest earned
$ 2,300.00
Total revenues
$ 1,24,900.00
Expenses:
Depreciation expense—Building
$ 12,980.00
Depreciation expense—Equipment
$ 7,500.00

7. Wages expense
$ 31,000.00
Interest expense
$ 3,400.00
Insurance expense
$ 7,600.00
Rent expense
$ 10,100.00
Supplies expense
$ 6,100.00
Postage expense
$ 2,900.00
Property taxes expense
$ 4,700.00
Repairs expense
$ 7,200.00
Telephone expense
$ 2,400.00
Utilities expense
$ 3,300.00
Total Expenses
$ 99,180.00
Net Income
$ 25,720.00