ETech Company was organized on January 1, 2017 to produce and sell a revolutionary smart watch. At the beginning of its second year (2018) finished goods inventory was 2,000 watches. During 2018 ETech accountant resigned and the accounting was done by an accounting student who worked part-time for the company. The income statement below was prepared by the accounting student. Revenues: Sales revenue (38,000 watches).. Royalty revenue. Gain on sale of trading investment. Deferred rent revenue Interest payable... Total revenues Operating expenses: ETech Company Income Statement As of December 31, 2018 $1,140,000 500 7,000 3,500 3,700 $1,154,700 Cost of goods manufactured. $1,113,000 Selling and distribution expense. 195,000 General and administrative expense... 95,000 Restructuring costs... 25,000 Short-term investments. 17,000 Interest expense. 5,000 Dividend paid. 1,000 Total operating expenses 1,451,000 Net loss ($296,300) ETech Company Schedule of Cost of Goods Manufactured As of December 31, 2018 Purchase of direct materials. 360,000 Direct manufacturing labor costs 79,000 Indirect Manufacturing Overhead: Factory maintenance. $35,000 Factory insurance 3,000 Indirect manufacturing labor costs.. 105,000 Rent expense 84,000 Utilities expense 30,000 Research & development expense. 15,000 Prepaid factory insurance.. 2,000 Factory equipment 500,000 Accumulated depreciation - factory equipment (100,000) Total indirect manufacturing overhead.... 674,000 Cost of goods manufactured $1,113,000 Additional information about the company's activities during the year is as follows: a. In 2018 the company produced 40,000 watches. b. Inventories at the beginning and end of the year were as follows: Direct materials.. Work in process Finished goods January 1, 2018 $8,000 $25,200 $37,800 December 31, 2018 $10,000 49,000 c. Seventy five percent (75%) of rent expense relates to manufacturing, 15% to general and administrative expense and 10% to selling and distribution expense. Also, 90% of utilities expense relates to manufacturing, 6% to general and administrative expense and 4% to selling and distribution expense. d. Factory equipment was purchased January 2, 2017 and is estimated to have a useful life of 10 years with a $5,000 salvage value remaining at the end of its useful life. The company uses the double- declining-balance method of depreciation. The accumulated depreciation of $100,000 reported in the Schedule of Cost of Goods Manufactured resulted from 2017 factory equipment depreciation. No depreciation was charged for 2018. e. The company's tax rate is 21%. The company's CEO is concerned about the large net loss and hires your accounting firm to review the above financial statements. Required: 1. Prepare a corrected Schedule of Cost of Goods Manufactured for the year ended December 31, 2018. 2. Prepare a revised multiple-step income statement for the year ended December 31, 2018. 3. Calculate the cost of producing one watch (show calculation)