At December 31, 2011, Martin Consultants Has Assets of $430,000

question 14

Essay

At December 31, 2011, Martin Consultants has assets of $430,000 and liabilities of $205,000. Using the accounting equation and considering each case independently, determine the following:
a. Total Stockholders' Equity as of December 31, 2011.
b. Total Stockholders' Equity as of December 31, 2012, assuming that assets increased by $12,000 and liabilities increased by $15,000 in 2012.
c. Total Stockholders' Equity as of December 31, 2012, assuming that assets decreased by $8,000 and liabilities increased by $14,000 during 2012.

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Definitions:

Direct Labor

The wages and salaries of employees who are directly involved in the production of goods or services.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of goods, such as utilities, rent, and salaries for managers.

Direct Materials

The raw materials that can be physically and directly associated with manufacturing the end product.

Factory Overhead

All indirect costs associated with the production process, such as salaries for supervisors and costs for utilities, not directly attributed to specific units of products.