Problem $10-27$A $($Algo$)$ Schedule of cost of goods manufactured and sold LO $10-3$

Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year $2$: Cash, $$674,000$; Raw

Materials Inventory, $$67,000$; Work in Process Inventory, $$37,000$; Finished Goods Inventory, $$58,000$; Common Stock, $$598,000$; and

Retained Earnings, $$238,000.$ Antioch experienced the following accounting events during Year $2.$ Other than the adjusting entries for

depreciation, assume that all transactions are cash transactions.

Paid $$25,000$ of research and development costs.

Paid $$47,000$ for raw materials that will be used to make eBook readers.

Placed $$100,000$ of the raw materials cost into the process of manufacturing eBook readers.

Paid $$72,000$ for salaries of selling and administrative employees.

Paid $$92,000$ for wages of production workers.

Paid $$151,000$ 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 $$11,000$ salvage

value and a seven$-$year life. The amount of depreciation is computed as $[($Cost $-$ salvage$)$ useful life$].$ Specifically,

$$11,000.$

Paid $$151,000$ to purchase manufacturing equipment.

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 life. The amount of depreciation is computed as $[($Cost $-$ salvage$)$ useful life$].$ Specifically,

$($$$151,000-$$$25,000)7=$$$18,000.$

Paid $$47,000$ for rent and utility costs on the manufacturing facility.

Paid $$80,000$ for inventory holding expenses for completed eBook readers $($rental of warehouse space, salaries of warehouse

personnel, and other general storage cost$).$

Completed and transferred eBook readers that had total cost of $$255,000$ from work in process inventory to finished goods.

Sold $830$ eBook readers for $$431,000.$

It cost Antioch $$166,000$ to make the eBook readers sold in Event $13.$

Required:

a$.$ Show how these events affect the balance sheet, income statement, and statement of cash flows by recording them in a horizontal

financial statements model.

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.