Kế toán, kiểm toán - Chapter 26: Accounting for manufacturing activities

1-*McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.Accounting forManufacturing Activities Section 1: Accounting forManufacturing Activities Chapter26Section ObjectivesPrepare a statement of cost of goods manufactured. Explain the basic components of manufacturing cost.Prepare an income statement for a manufacturing business.Prepare a balance sheet for a manufacturing business.Manufacturing BusinessesMerchandising businesses purchase goods to be resold in the same condition and form but at a profit.Manufacturing businesses purchase and convert raw materials into finished goods to be sold at a profit.Merchandising BusinessesComparisonThe Cost of Goods Manufactured line item replaces the Purchases line item on the income statementStatement of Cost of Goods ManufacturedManufacturing Costs Consist of Three ComponentsRawMaterialsDirect LaborManufacturingOverheadRaw MaterialsRaw materials consist of direct and indirect materials.Examples of direct materials are wood, glue, varnish, or hardware for a furniture maker.Indirect materials are used to work on the products, but do not become a part of the product.Raw Materials and the Statement of Cost of Goods Manufactured1. Compute total  materials availableCompute raw materials usedExamples of Direct Labor CostsSalaries of workers who shape the lumber.Salaries of workers who assemble the pieces into trailers.Labor costs for workers who paint or finish the final products.Indirect LaborCosts of personnel who support productionbut are not directly involved in manufacturing (supervisors, janitors, maintenance staff).Manufacturing OverheadManufacturing overhead includes all of the costs that are not classified as direct materials and direct labor.Manufacturing overhead may include the following:Indirect labor - Costs attributable to personnel who support the production process. Indirect supplies Utilities Depreciation Repair and maintenance Property taxes InsuranceAccounting for Work in Process on the Income Statement An estimate is made of the costs of raw materials, direct labor, and manufacturing overhead that apply to work in process at the end of the periodIncome Statement for a Manufacturing ConcernFigure taken from the cost of goods manufactured statementThe balance sheet for a manufacturing business contains three inventory categoriesInventoriesRaw Materials24,000.00Work in Process12,000.00Finished Goods29,000.0065,000.00Trailer Manufacturing CompanyPartial Balance SheetDecember 31, 2013Inventories and the Balance Sheet for a Manufacturing BusinessAccounting forManufacturing Activities Section 2: Completing theAccounting Cycle Chapter26Section ObjectivesPrepare a worksheet for a manufacturing business.Record the end-of-period adjusting entries for a manufacturing business.Record closing entries for a manufacturing business.Record reversing entries for a manufacturing business.The steps in the accounting cycle do not change for a manufacturing business.The worksheet must be constructed to facilitate preparation of the cost of goods manufactured statement.The worksheet has two new columns:Cost of Goods Manufactured Debit columnCost of Goods Manufactured Credit columnThe Accounting Cycle for a Manufacturing BusinessRaw Materials InventoryWork in Process InventoryFinished Goods InventoryDirect LaborVarious Manufacturing Overhead AccountsManufacturing Summary The worksheet of a manufacturing business contains several new accounts: Adjusting Inventory Accounts6. DR Finished Goods Inventory CR Income Summary  for ending inventory  amountDR Work in Process Inventory CR Manufacturing Summary  for ending inventory  amountDR Raw Materials Inventory CR Manufacturing Summary  for ending inventory  amount5. DR Income Summary CR Finished Goods Inventory  for beginning inventory amountDR Manufacturing Summary CR Work in Process Inventory for beginning inventory  amountDR Manufacturing Summary CR Raw Materials Inventory  for beginning inventory  amountFinished GoodsWork in ProcessRaw MaterialsInventoryUncollectible accountsExpired insuranceSupplies on handDepreciationAccrued salariesPayroll taxes on accrued payrollIncome tax payable Adjusting Entries on the WorksheetPreparing Financial Statements From the WorksheetThree sets of columns exist for the financial statements:Cost of Goods ManufacturedIncome StatementBalance Sheet