Fanning Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). Al manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary. Cash Raw materials inventory Work in process inventory Finished goods inventory Common stock Retained earnings Totals $193,200 3,860 5,800 6,770 $124,620 85,010 $209,630 $209,630 The subsidiary completed the following transactions during Year 2. 1. Paid $57,970 cash for direct raw materials. 2. Transferred $48,310 of direct raw materials to work in process. 3. Paid production employees $77,300 cash. 4. Applied $51,210 of manufacturing overhead costs to work in process. 5. Completed work on products that cost $157,490. 6. Sold products that cost $138,160 for $175,850 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b. 7. Paid $19,330 cash for selling and administrative expenses. 8. Actual overhead costs paid in cash amounted to $53,150. 9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial). 10. Made a $4,820 cash distribution to the owners. Required a. For Anywhere, Inc., record the events in a financial statements model. The first event is shown as an example. b. Prepare a schedule of cost of goods manufactured and sold. c. Prepare an income statement and a balance sheet. Reg C Inc Reg A ReqB Req C Bal Sheet Stmt For Anywhere, Inc., record the events in a financial statements model. The first event is shown as an example. (Enter decreases to account balances with a minus sign.) Income Statement Revenue - Expense = Net Income Cash Manufacturing Overhead Balance Sheet Assets Raw Work in + Materials Process + $ $ 3,860 + $ 5,800 + + + Event No. Beg. Bal 1. 2 + Equity Common Retained Stock Earnings $ 124,620 + $ 85,010 Finished Goods $ 6,770 = $ 193,200 + - + + + + = + + + + = 3. + + + + 4. + + + + + 5. + + + + + + + + + + - . 6b. 7. + + + = + = + + + + + 8. + + + + = + = + + + + 9. 10. Total + + + + + $ 193,200 + $ 0 + $ $ 3.860 + $ 5,800 + $ 6,770 = 1 $ 124,620 + $ 85,010 $ $ $ 01 = $ 0 Req A Reg B ReqC Inc Stmt Req C Bal Sheet Prepare a schedule of cost of goods manufactured and sold. 3,860 ANYWHERE, INC. Schedule of Cost of Goods Manufactured and Sold For Year Ended December, 31 Year 2 Beginning raw materials inventory $ Purchases Raw materials available for use Direct labor Direct raw materials used 3,860 3,860 Total manufacturing costs 3,860 Total work in process inventory 3,860 Cost of goods manufactured 3,860 Cost of goods available for sale 3,860 Cost of goods sold $ 3,860 Reg A Reg B Req C Inc Stmt Req C Bal Sheet Prepare an income statement. ANYWHERE, INC. Income Statement For Year Ended December 31, Year 2 0 $ 0 Reg A Reg B ReqC Inc Stmt Req C Bal Sheet Prepare a balance sheet. ANYWHERE, INC. Balance Sheet December 31, Year 2 Assets $ 0 Total assets Stockholders' equity Total stockholders' equity 0
