Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash $668,000, Raw Materials inventory. $59.000, Work in Process Inventory, $19.000; Finished Goods Inventory $56,000: Common Stock, $598,000 and Retained Earnings. $204000 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 $28,000 of research and development costs. 2. Paid $60,000 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 $61.000 for salaries of selling and administrative employees. 5. Paid $95,000 for wages of production workers. 6. Paid $100,000 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 elght-year life. The amount of depreciation is computed as [(Cost - salvage) = useful life). Specifically, ($100,000 - $20,000) 8 $10,000. 8. Paid $152,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, Year 2. It has a $26.000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) + useful life). Specifically ($152.000 - $26.000) + 7 = $18,000. 10. Paid $63,000 for rent and utility costs on the manufacturing facility 11. Paid $73,000 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 $259.000 from work in process inventory to finished goods. 13. Sold 990 eBook readers for $429,000. 14. It cost Antioch $198.000 to make the eBook readers sold in Event 13. Required: 0. 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 ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, Year 2 Beginning raw materials Inventory $ 59,000 Purchases 60,000 Raw materials available 119,000 Ending raw materials inventory 22,000 X Raw materials used 141,000 Labor 95,000 Overhead 81,000 Total manufacturing costs 317,000 Beginning work in process 19,000 inventory Total work in process inventory 336,000 Ending work in process inventory 33,000 X Cost of goods manufactured 369,000 Beginning finished goods inventory 56,000 Goods available 425,000 Ending finished goods inventory 117,000 X Cost of goods sold $ 542,000
