Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $679,000; R
Posted: Sun Jun 05, 2022 6:41 pm
Antioch Company makes eBook readers. The company had the
following amounts at the beginning of Year 2: Cash, $679,000; Raw
Materials Inventory, $55,000; Work in Process Inventory, $19,000;
Finished Goods Inventory, $46,000; Common Stock, $587,000; and
Retained Earnings, $212,000. Antioch experienced the following
accounting events during Year 2. Other than the adjusting entries
for depreciation, assume that all transactions are cash
transactions. Paid $29,000 of research and development costs. Paid
$62,000 for raw materials that will be used to make eBook readers.
Placed $98,000 of the raw materials cost into the process of
manufacturing eBook readers. Paid $61,000 for salaries of selling
and administrative employees. Paid $92,000 for wages of production
workers. Paid $118,000 to purchase equipment used in selling and
administrative offices. Recognized depreciation on the office
equipment. The equipment was acquired on January 1, Year 2. It has
a $18,000 salvage value and a five-year life. The amount of
depreciation is computed as [(Cost – salvage) ÷ useful life].
Specifically, ($118,000 – $18,000) ÷ 5 = $20,000. Paid $108,000 to
purchase manufacturing equipment. Recognized depreciation on the
manufacturing equipment. The equipment was acquired on January 1,
Year 2. It has a $20,000 salvage value and a eight-year life. The
amount of depreciation is computed as [(Cost – salvage) ÷ useful
life]. Specifically, ($108,000 – $20,000) ÷ 8 = $11,000. Paid
$56,000 for rent and utility costs on the manufacturing facility.
Paid $75,000 for inventory holding expenses for completed eBook
readers (rental of warehouse space, salaries of warehouse
personnel, and other general storage cost). Completed and
transferred eBook readers that had total cost of $242,000 from work
in process inventory to finished goods. Sold 870 eBook readers for
$431,000. It cost Antioch $165,300 to make the eBook 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. c-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.
following amounts at the beginning of Year 2: Cash, $679,000; Raw
Materials Inventory, $55,000; Work in Process Inventory, $19,000;
Finished Goods Inventory, $46,000; Common Stock, $587,000; and
Retained Earnings, $212,000. Antioch experienced the following
accounting events during Year 2. Other than the adjusting entries
for depreciation, assume that all transactions are cash
transactions. Paid $29,000 of research and development costs. Paid
$62,000 for raw materials that will be used to make eBook readers.
Placed $98,000 of the raw materials cost into the process of
manufacturing eBook readers. Paid $61,000 for salaries of selling
and administrative employees. Paid $92,000 for wages of production
workers. Paid $118,000 to purchase equipment used in selling and
administrative offices. Recognized depreciation on the office
equipment. The equipment was acquired on January 1, Year 2. It has
a $18,000 salvage value and a five-year life. The amount of
depreciation is computed as [(Cost – salvage) ÷ useful life].
Specifically, ($118,000 – $18,000) ÷ 5 = $20,000. Paid $108,000 to
purchase manufacturing equipment. Recognized depreciation on the
manufacturing equipment. The equipment was acquired on January 1,
Year 2. It has a $20,000 salvage value and a eight-year life. The
amount of depreciation is computed as [(Cost – salvage) ÷ useful
life]. Specifically, ($108,000 – $20,000) ÷ 8 = $11,000. Paid
$56,000 for rent and utility costs on the manufacturing facility.
Paid $75,000 for inventory holding expenses for completed eBook
readers (rental of warehouse space, salaries of warehouse
personnel, and other general storage cost). Completed and
transferred eBook readers that had total cost of $242,000 from work
in process inventory to finished goods. Sold 870 eBook readers for
$431,000. It cost Antioch $165,300 to make the eBook 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. c-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.