Question
Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $663,000; Raw Materials Inventory, $62,000; Work in Process
Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $663,000; Raw Materials Inventory, $62,000; Work in Process Inventory, $24,000; Finished Goods Inventory, $54,000; Common Stock, $598,000; and Retained Earnings, $205,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.
- Paid $26,000 of research and development costs.
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Paid $53,000 for raw materials that will be used to make eBook readers.
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Placed $99,000 of the raw materials cost into the process of manufacturing eBook readers.
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Paid $62,000 for salaries of selling and administrative employees.
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Paid $103,000 for wages of production workers.
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Paid $61,000 to purchase equipment used in selling and administrative offices.
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Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $11,000 salvage value and a five-year life. The amount of depreciation is computed as [(Cost salvage) useful life]. Specifically, ($61,000 $11,000) 5 = $10,000.
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Paid $181,000 to purchase manufacturing equipment.
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Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $29,000 salvage value and a eight-year life. The amount of depreciation is computed as [(Cost salvage) useful life]. Specifically, ($181,000 $29,000) 8 = $19,000.
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Paid $47,000 for rent and utility costs on the manufacturing facility.
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Paid $79,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost).
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Completed and transferred eBook readers that had total cost of $252,000 from work in process inventory to finished goods.
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Sold 820 eBook readers for $437,000.
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It cost Antioch $139,400 to make the eBook readers sold in Event 13.
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c-1. Prepare a schedule of cost of goods manufactured and sold for the year
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c-2. Prepare a formal income statement for the year
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c-3. Prepare a balance sheet for the year.
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