A Manufacturing Organization’s Balance Sheet
The following information is from the trial balance of Mills Manufacturing Company:
| Debit | Credit | |
| Cash | $ 34,000 | |
| Accounts Receivable | 27,000 | |
| Materials Inventory, ending | 31,000 | |
| Work in Process Inventory, ending | 47,900 | |
| Finished Goods Inventory, ending | 54,800 | |
| Production Supplies | 5,700 | |
| Small Tools | 9,330 | |
| Land | 160,000 | |
| Factory Building | 575,000 | |
| Accumulated Depreciation–Factory Building | $ 199,000 | |
| Factory Equipment | 310,000 | |
| Accumulated Depreciation– | ||
| Factory Equipment | 137,000 | |
| Patents | 33,500 | |
| Accounts Payable | 26,900 | |
| Insurance Premiums Payable | 6,700 | |
| Income Taxes Payable | 41,500 | |
| Mortgage Payable | 343,000 | |
| Common Stock | 200,000 | |
| Retained Earnings | 334,130 | |
| $1,288,230 | $1,288,230 |
Required
1. Manufacturing organizations use asset accounts that are not needed by retail organizations.
a. List the titles of the asset accounts that are specifically related to manufacturing organizations.
b. List the titles of the asset, liability, and equity accounts that you would see on the balance sheets of both manufacturing and retail organizations.
2. Assuming that the following information reflects the results of operations for the year, calculate the (a) gross margin, (b) cost of goods sold, (c) cost of goods available for sale, and (d) cost of goods manufactured:
| Operating income | $138,130 |
| Operating expenses | 53,670 |
| Sales | 500,000 |
| Finished goods inventory, beginning | 50,900 |
3. Does Mills manufacturing use the periodic or perpetual inventory system?
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