Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2 Cash $660,000, Raw Materials Inventory. $51.000: Work in Process Inventory. $18,000. Finished Goods Inventory. $43.000. Common Stock. 5583,000; and Retained Earnings. $189.000. Antioch experienced the following accounting events during Year 2 Other than the adjusting entries for depreciation, assume that all transactions are cash transactions 1. Pald $23,000 of research and development costs. 2. Paid $47.000 for raw materials that will be used to make eBook readers. 3. Placed $83,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $60,000 for salaries of selling and administrative employees 5. Paid $91,000 for wages of production workers 6. Paid $90.000 to purchase equipment used in seling and administrative offices 7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, Year 2 it has a $10,000 salvage value and a five-year life. The amount of depreciation is computed as [(Cost-salvage) - useful life) Specifically. (590.000 $10,000) - 5 - $16.000 8. Paid $165,000 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 ife. The amount of depreciation is computed a fost - salvage) + useful life]. Specifically (5165,000 - $25.000) - 7 - $20,000 10. Pald $45.000 for rent and utility costs on the manufacturing facility 11. Paid $70,000 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 $240.000 from work in process inventory to finished goods 13. Sold 1000 eBook readers for $420,000 14. It cost Antioch $220,000 to make the eBook readers sold in Evert 13 Required: 1. Show how these events affect the balance sheet income statement, and statement of cash flows by recording them in a horizontal financial statements model 0-1. 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 3 DO MOON TE @ 100 2000 00 000 De + TO 2000 DO C. @N . 2 . @ 100 000 . . - 000 LO . . . 10000 DAO D. 000 - @ DO 100 ANTOLON 62 ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, Year 2 Beginning raw materials inventory 51.000 Purchases 47.000 Raw materials available 98.000 Ending raw materials inventory 15.000 X Raw materials used 113,000 Labor 91.000 Overhead 65.000 Total manufactuning costs 269.000 Beginning work in process 18,000 inventory Total work in process inventory 287,000 Ending work in process inventory 17.000 x Cost of goods manufactured 304,000 Beginning finished goods inventory 43,000 Goods available 347 000 Ending finished goods inventory 63.000 X Cost of goods sold IS 410.000 ( Req A ANTIOCH COMPANY Balance Sheet As of December 31, Year 2 Assets Cash GO 489.000 15.000 42,000 X Raw materials inventory Work in process inventory Finished goods inventory Office equipment Manufacturing equipment 63.000 74.000 145.000 Total assets S CA 828,000 Stockholders Equity Common stock S 583.000 Retained earnings 236.000 Total stockholders' equity CA 819,000
