Question
Adams Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones.
Adams 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:
| Cash | $ | 204,800 | ||||||
| Raw materials inventory | 4,100 | |||||||
| Work in process inventory | 6,150 | |||||||
| Finished goods inventory | 7,180 | |||||||
| Common stock | $ | 132,110 | ||||||
| Retained earnings | 90,120 | |||||||
| Totals | $ | 222,230 | $ | 222,230 | ||||
The subsidiary completed the following transactions during 2017:
- Paid $61,450 cash for direct raw materials.
- Transferred $51,210 of direct raw materials to work in process.
- Paid production employees $81,940 cash.
- Applied $54,290 of manufacturing overhead costs to work in process.
- Completed work on products that cost $166,970.
- Sold products that cost $146,480 for $186,430 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.
- Paid $20,490 cash for selling and administrative expenses.
- Actual overhead costs paid in cash amounted to $56,350.
- Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).
- Made a $5,120 cash distribution to the owners.
Required
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For Anywhere, Inc., record the events in a horizontal statements model. The first event is shown as an example.
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Prepare a schedule of cost of goods manufactured and sold.
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Prepare an income statement and a balance sheet.
For Anywhere, Inc., record the events in a horizontal statements model. The first event is shown as an example. (Enter decreases to account balances with a minus sign.)
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