Question

Help Problem 10-27A (Algo) Schedule of cost of goods manufactured and sold LO 10-3 Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $673,000; Raw Materials Inventory. $66,000; Work in Process Inventory. $27,000; Finished Goods Inventory $50,000; Common Stock $585,000; and Retained Earnings. $231,000. Antioch experienced the following accounting events during Year 2. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions 1. Paid $30,000 of research and development costs. 2. Pald $53.000 for raw materials that will be used to make eBook readers. 3. Placed $100,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $77,000 for salaries of selling and administrative employees. 5. Pald $100,000 for wages of production workers. 6. Paid $72,000 to purchase equipment used in selling and administrative offices. 7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, Year 2. It has a $12,000 salvage value and a styear life. The amount of depreciation is computed as (Cost-salvage) + useful life). Specifically. ($72,000 - $12,000) + 6 = $10,000 8. Pald $154,000 to purchase manufacturing equipment 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1 Year 2. It has a $28,000 salvage value and a nine-year life. The amount of depreciation is computed as [(Cost-salvage) + useful life]. Specifically, ($154,000 - $28,000) 9 - $14,000, 10. Paid $55,000 for rent and utility costs on the manufacturing facility 11. Paid $77,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost). 12. Completed and transferred eBook readers that had total cost of $255.000 from work in process inventory to finished goods. 14. It cost Antioch $176,700 to make the look readers sold in Event 13. Required a. Show how these events affect the balance sheet, income statement, and statement of cash flows by recording them in a horizontal financial statements model 0-1. Prepare a schedule of cost of goods manufactured and sold for the year, c-2. Prepare a formal income statement for the year c-3. Prepare a balance sheet for the year. < Prev 2 of 2 Next MacBook Air DOS 16 $ 4 % 5 & 7 3 6 8. 9 W E R T Y U O Р S D F G H K L

Answer 1

c-1.  

Antioch Company Schedule of Cost of Goods Manufactured and Sold For the year ended December 31, Year 2
Beginning raw materials inventory	$ 66,000
Purchases	53,000
Raw materials available	119,000
Ending raw materials inventory	- 19,000
Raw materials used	100,000
Labor	100,000
Overhead	69,000
Total manufacturing costs	269,000
Beginning work in process inventory	27,000
Total work in process inventory	296,000
Ending work in process inventory	- 41,000
Cost of goods manufactured	255,000
Beginning finished goods inventory	50,000
Goods available for sale	305,000
Ending finished goods inventory	- 128,300
Cost of goods sold	$ 176,700

c-2.

Antioch Company Income Statement For the year ended December 31, Year 2
Sales revenue	$ 437,000
Cost of goods sold	176,700
Gross margin	260,300
Selling and administrative expenses	194,000
Net income	$ 66,300