sam Manufacturing Company was started on Jan 1, 2008,when it acquired $85,000 cash by issuing common stock.?

Question

sam immediately purchased office furniture and manufacturing equipment costing $12,000 and $34,000, respectively. The office furniture had a 6-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of 5 years. The company paid $10,000 for salaries of administrative personnel and $15,000 for wages to production personnel. Finally, the company paid $18,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. sam completed production on 6,000 units of product and sold 5,000 units at a price of $15 each in 2008.
Direct Materials=18000,Direct Labor= 15000,Manufacturing Overhead = 6000 , Total Product Cost = 39000,Divided by = 6000,Average Cost Per Unit = 6.5,Cost of goods sold is $32500,Ending inventory = 6500,Net income = 30500,Retained earnings = 30500, total assets = ?,Net cash flow from operating activities = ?,Net cash flow from investing activities = ?

Answer 1

Ending cash bal. = 85k + 75k (from sales) - 12k - 34k - 10k - 15k - 18k = 71k

Net book value of mfg equip. = 34k - 6k = 28k
Nbv of office equip. = 12k - 2k = 10k

Total assets:
Fixed assets (at nbv) 38k (see above 28k + 10k)
Inventories 6.5k
Cash 71k
Total assets = 115,500

Net cash flow from op'g activities:
NI 30,500
Adjustment for:
Depn 8,000
Increase in inventory (6,500)
Net cash flow from op'g activities = 32,000

Net cash used in investing activities:
Purchase of fixed assets, mfg equipment + office equipment (46,000)