Magnificent Modems, Inc., acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones.

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Magnificent Modems, Inc., acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary.

The subsidiary completed the following transactions during 2011.
1. Paid $60,000 cash for direct raw materials.
2. Transferred $50,000 of direct raw materials to work in process.
3. Paid production employees $80,000 cash.
4. Applied $53,000 of manufacturing overhead costs to work in process.
5. Completed work on products that cost $163,000.
6. Sold products that cost $143,000 for $182,000 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.
7. Paid $20,000 cash for selling and administrative expenses.
8. Actual overhead costs paid in cash amounted to $55,000.
9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).
10. Made a $5,000 cash distribution to the owners.

Required
a. For Anywhere, Inc., record the events in the financial statements model like the one shown below.
b. Prepare a schedule of cost of goods manufactured and sold.
c. Prepare an income statement and a balancesheet.

Cash Raw materials inventory Work in process inventory Finished goods inventory Common stock Retained earnings Totals $200,000 6,000 7,000 $129,000 88,000 $217,000 $217,000