Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $670,000, Raw Materials Inventory $56,000; Work in Process Inventory, $25,000; Finished Goods Inventory $56,000, Common Stock $594,000 and Retained Earnings $213,000. Antioch experience the following accounting events during Year 2. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions. 1. Paid $25,000 of research and development costs. 2. Paid $51,000 for raw materials that will be used to make eBook readers. 3. Placed $93,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $64,000 for salaries of selling and administrative employees 5. Paid $106,000 for wages of production workers. 6. Paid $98,000 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 $18,000 salvage value and a eight-year life. The amount of depreciation is computed as [(Cost - salvage) + useful life). Specifically, ($98,000 - $18,000) - 8 $10,000 8. Paid $109,000 to purchase manufacturing equipment 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1. Year 2. It has a $25,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) + useful life). Specifically, ($109,000 - $25,000) + 7 = $12,000 10. Poid $61,000 for rent and utility costs on the manufacturing facility. 11. Pald $72,000 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 $243,000 from work in process inventory to finished goods. 13. Sold 980 eBook readers for $437,000 14. It cost Antioch $166,600 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. 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. Statement of Cash Flows, indicate whether the item is an operating activity (OA). Investing activity (IA), or financing activity (FA). If an item is not affected, leave the cell ANTIOCH COMPANY Financial Statements Model Balance Sheet Income Statement Assets Stockholders' Equity State Cash Finished Goods BV Office Furniture Work in Process Inventory 25.000 BV Manufacturing Equipment Common Stock Revenue - Expense - Net Income Materials 56.000 - Retained Earnings 213,000 670.000 56.000- 594,000 + . . . 670,000 56.000 25.000 56,000 594,000 253,000 0 0 minus sign.) 5 ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, Year 2 Beginning raw materials Inventory $ 56,000 Purchases 51,000 Raw materials available 107,000 Ending raw materials inventory (14,000) Raw materials used 93,000 Labor 93,000 Overhead 73,000 Total manufacturing costs 259,000 Beginning work in process inventory 25,000 Total work in process inventory 284,000 Ending work in process inventory (42,000) Cost of goods manufactured 242,000 Beginning finished goods inventory 56,000 Goods available 298,000 Ending finished goods inventory 131,400 Cost of goods sold $ 429,400