Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year...

 

  
 
 
 

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Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $673,000; Raw Materials Inventory, $63,000; Work in Process Inventory, $35,000; Finished Goods Inventory, $52,000; Common Stock, $601,000; and Retained Earnings, $222,000. 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 $24,000 of research and development costs. 2. Paid $49,000 for raw materials that will be used to make eBook readers. 3. Placed $97,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $68,000 for salaries of selling and administrative employees. 5. Paid $93,000 for wages of production workers. 6. Paid $120,000 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 $20,000 salvage value and a five-year ife. The amount of depreciation is computed as ({Cost – salvage) = useful life). Specifically, ($120,000 - $20,000) + 5 = $20.,000. 8. Paid $177,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, Year 2. It has a $24,000 salvage value and a nine-year life. The amount of depreciation is computed as ({{Cost – salvage) + useful life). Specifically. ($177,000 - $24,000) +9- $17,00o. 10. Paid $51,000 for rent and utility costs on the manufacturing facility. 11. Paid $80,000 for inventory holding expenses for completed eBook readers (rentai of warehouse space, salaries of warehouse personnel, and other general storage cost). 12. Completed and transferred eBook readers that had total cost of $243,000 from work in process inventory to finished goods. 13. Sold 910 eBook readers for $424,000. 14. It cost Antioch $191,100 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 modelL 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, Check my work ANTIOCH COMPANY Financial Statements Model Balance Shoet Income Statement Event Assets Stockholders' Equity No. Work in Process BV Office Furniture Raw Finished BV Manufacturing Equipment Retained Earmings Common Cash Revenue-Expense Net Income Materials Goods Stock Inventory 35,000 673,000 63,000 52,000+ 601,000+ 222,000 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14 Total Ra A Req C1> ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, Year 2 Beginning raw materials Inventory Purchases Raw materials available Ending raw materials inventory es Raw materials used Labor Overhead Total manufacturing costs Beginning work in process inventory Total work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Goods available Ending finished goods inventory Cost of goods sold Prepare a formal income statement for the year. ANTIOCH COMPANY Income Statement For the Year Ended December 31, Year 2 < Req C1 Prepare a balance sheet for the year. ANTIOCH COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets Stockholders' Equity Total stockholders' equity < Req C2 Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $673,000; Raw Materials Inventory, $63,000; Work in Process Inventory, $35,000; Finished Goods Inventory, $52,000; Common Stock, $601,000; and Retained Earnings, $222,000. 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 $24,000 of research and development costs. 2. Paid $49,000 for raw materials that will be used to make eBook readers. 3. Placed $97,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $68,000 for salaries of selling and administrative employees. 5. Paid $93,000 for wages of production workers. 6. Paid $120,000 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 $20,000 salvage value and a five-year ife. The amount of depreciation is computed as ({Cost – salvage) = useful life). Specifically, ($120,000 - $20,000) + 5 = $20.,000. 8. Paid $177,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, Year 2. It has a $24,000 salvage value and a nine-year life. The amount of depreciation is computed as ({{Cost – salvage) + useful life). Specifically. ($177,000 - $24,000) +9- $17,00o. 10. Paid $51,000 for rent and utility costs on the manufacturing facility. 11. Paid $80,000 for inventory holding expenses for completed eBook readers (rentai of warehouse space, salaries of warehouse personnel, and other general storage cost). 12. Completed and transferred eBook readers that had total cost of $243,000 from work in process inventory to finished goods. 13. Sold 910 eBook readers for $424,000. 14. It cost Antioch $191,100 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 modelL 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, Check my work ANTIOCH COMPANY Financial Statements Model Balance Shoet Income Statement Event Assets Stockholders' Equity No. Work in Process BV Office Furniture Raw Finished BV Manufacturing Equipment Retained Earmings Common Cash Revenue-Expense Net Income Materials Goods Stock Inventory 35,000 673,000 63,000 52,000+ 601,000+ 222,000 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14 Total Ra A Req C1> ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, Year 2 Beginning raw materials Inventory Purchases Raw materials available Ending raw materials inventory es Raw materials used Labor Overhead Total manufacturing costs Beginning work in process inventory Total work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Goods available Ending finished goods inventory Cost of goods sold Prepare a formal income statement for the year. ANTIOCH COMPANY Income Statement For the Year Ended December 31, Year 2 < Req C1 Prepare a balance sheet for the year. ANTIOCH COMPANY Balance Sheet As of December 31, Year 2 Assets Total assets Stockholders' Equity Total stockholders' equity < Req C2

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