Journal Entry Debit Credit

1) Cash $80,000
Patent $120,000
Capital Stock $200,000
2) Incorporation expense $2,500
Cash $2,500
3) Equipment $85,000
Cash $85,000
4) Labor and Development expense $25,000
Cash $25,000
5) Raw materials inventory $212,100
Cash $212,100
6) Cash $30,000
Accounts Payable $30,000
7) Payroll Expense $145,000
Cash $145,000
8) Manufacturing Expense $62,000
Cash $62,000
9) SGA $63,000
Cash $63,000
10)a Work in progess inventory $197,000 We haven't covered these but, we'll probably eventually get there
Raw materials inventory $197,000
10)b Finished goods inventory $197,000
Work in progess inventory $197,000
10)c Cost of goods sold $404,000
Inventory $404,000
11) Cash $598,000
Sales $598,000
12) Depreciation Expense $8,500
Accumulated depreciation $8,500
13) Amortization Expense $20,000
Accumulated Amortization $20,000
14) Retained Earnings $5,000
Dividends payable $5,000
Dividends payable $5,000
cash $5,000
15) Income Tax Expense $22,500
Income Tax Payable $22,500
Income Tax Payable $22,500
Cash $22,500
16) Interest Expense $500
Interest Payable $500
17) Interest Payable $500
Accounts Payable $30,000
Cash $30,500
We haven't covered these but, we'll probably eventually get there
Cash Raw Materials Work In Process Inventory Finished Goods
80,000 $
(2,500) $
(85,000) $
(25,000) $
(212,100) $ 212,100 $
30,000 $
(30,500) $
(145,000) $ 145,000 $
(62,000) $ 62,000 $
(63,000) $
(197,000) $ 197,000 $
598,500 $
(404,000) $ 404,000 $
(404,000) $
(5,000) $
78,400 $ 15,100 $
Assets = 270,000 $
Equipment Patent Loans Payable Income Tax Payable Equity
120,000 $ 200,000 $
(2,500) $
85,000 $
(25,000) $
30,000 $
(30,000) $ (500) $
(63,000) $
598,500 $
(8,500) $ (8,500) $
(20,000) $ (20,000) $
(404,000) $
(5,000) $
22,500 $ (22,500) $
76,500 $ 100,000 $ 247,500 $
Liabilities + Equity = 270,000 $
Description
capital stock
incorportation cost
out of pocket cost
components
interest expense+principal
manufacturing payroll (overhead
manufacturing costs (overhead)
SGA
sales revenue
depreciation expense
patent cost
Cost of Goods sold
Dividends
Income tax expense
Sales Revenue 598,500.00 $ Raw Materials Used
Cost of Goods Sold 404,000.00 $ Manufacturing Overhead
Gross Profit 194,500.00 $
Operating Expenses
Incorporation Cost 2,500.00 $ Total Manufacturing Costs
Out of Pocket Cost 25,000.00 $ Add: Beginning Work in Process Inventory
SG&A 63,000.00 $ Total Cost Placed In Process
Depreciation Expense 8,500.00 $ Less: Ending Work in Process Inventory
Patent Cost 20,000.00 $ 119,000.00 $ Costs of Goods Manufactured
Operating Income 75,500.00 $
Interest Expense 500.00 $
Income Before Tax 75,000.00 $
Income Tax Expense 22,500.00 $
Net Income 52,500.00 $
Less: Dividends 5,000.00 $
Retained Earnings 47,500.00 $
Dispensers of California, Inc.
Income Statement
For the Year Ended
Schedule of Cost of Goods Sold
Raw Materials Used 197000
Manufacturing Overhead
Manufacturing Payroll 145000
Manufacturing Costs 62000 207000
Total Manufacturing Costs 404000
Add: Beginning Work in Process Inventory 0
Total Cost Placed In Process 40400
Less: Ending Work in Process Inventory 0
Costs of Goods Manufactured 404000
Schedule of Cost of Goods Sold
Current Assets
Cash 78400
Raw Materials 15100 93500
Fixed Assets
Equipment 76500 76500
Other Assets
Patent 100000 100000
Total Assets 270000
Noncurrent liabilities
Income Tax payable 22500
Total Liabilities 22500
Owners Equity
Capital 200000
Retained Earnings 47500
270000