The Following Decisions and Transactions Were Made for the Sanders

question 63

Essay

The following decisions and transactions were made for the Sanders Company in May:
May 1 The production manager informed the storeroom keeper that the forecasted usage of Component X is 3,000 units.There are 1,500 units on hand,each having a unit cost of $20.The company maintains a minimum stock of 1,000 units.The storeroom keeper notifies the purchasing agent that the company will need 2,500 units of X to meet May's production needs and maintain a minimum inventory of 1,200 units.
May 3 The purchasing agent checks with a number of vendors and orders 2,500 units of Component X.Unfortunately,the price has gone up to $25.
May 7 The shipment of Component X is received and inspected.The units are in good condition and the company received the number of units it ordered.
May 9 The invoice covering Component X is received from the vendor and approved for payment.
May 21 The May 9 invoice is paid in full.
May 31 During the month,2,950 units of Component X are issued to production.The company uses FIFO costing and a job order cost system.
May 31 An inventory of the storeroom is taken at the end of the day and there are 1,040 units of Component X on hand.
(a)Prepare a table to answer the following questions:
(1)What forms,if any,were used?
(2)What entry,if any,was recorded?
(b)Calculate the balance in the Materials account at May 31.

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Definitions:

Income and Capital

Refers to the two primary ways wealth is generated: income through earnings like wages and investments, and capital through appreciating assets like real estate or stocks.

Assets Only

A focus on the asset side of the balance sheet, disregarding liabilities and equity to concentrate solely on the resources owned by a company.

Cross-tabulations

Statistical tools that summarize the distribution of two or more categorical variables in the form of a table, allowing for examination of relationships between them.

Categorical Data

Data that represent characteristics and can be divided into groups or categories that are distinctly different from one another.