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Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2 : Cash, $ 6 7 2 , 0

Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2: Cash, $672,000; Raw Materlals Inventory, $71,000; Work In Process Inventory, $21,000; FinIshed Goods Inventory, $50,000; Common Stock, $591,000; and Retained Earnings, $223,000. Antioch experienced the following accounting events during Year 2. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.
Pard $25,000 of research and development costs.
Pald $62,000 for raw materlals that will be used to make eBook readers.
Placed $98,000 of the raw materlals cost into the process of manufacturing eBook readers.
Pald $79,000 for salarles of selling and administrative employees.
Pald $102,000 for wages of production workers.
Pald $84,000 to purchase equipment used in selling and administrative offices.
Recognized depreciation on the office equipment. The equipment was acquired on January 1, Year 2. It has a $14,000 salvage value and a seven-year llfe. The amount of depreclation is computed as [(Cost - salvage) useful life]. Specifically, ($84,000-$14,000)7=$10,000.
Pald $127,000 to purchase manufacturing equipment.
Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, Year 2. It has a $22,000 salvage value and a seven-year llfe. The amount of depreclation is computed as [(Cost - salvage)- useful llfe]. Specifically, ($127,000-$22,000)7=$15,000.
Pald $62,000 for rent and utlllty costs on the manufacturing facillty.
Pald $76,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salarles of warehouse personnel, and other general storage cost).
Completed and transferred eBook readers that had total cost of $257,000 from work in process inventory to finished goods.
Sold 860 eBook readers for $428,000.
It cost Antioch $180,600 to make the eBook readers sold in Event 13.
Required:
a. Use a horizontal financlal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). The first event is recorded as an example.
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.
d. Distingulsh between the product costs and the upstream costs that Antloch incurred.
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