Problem 10-27A (Algo) Schedule of cost of goods manufactured and sold LO 103 Antioch Company makes eBook readers. The company had the following amounts at the beginning of Year 2 . Cash, $671,000, Raw Materials inventory. $65,000, Work in Process Inventory, $38,000; Finished Goods Inventory, $44,000; Common $ tock, $589,000; and Retained Earnings, $229,000. Antioch experienced the following accounting events during Year 2 Other than the adjusting entries for depreciation, assume that all transactions are cash transactions. 1. Paid $27,000 of research and development costs: 2. Paid $61,000 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 $71,000 for salaries of selling and administrative employees 5. Paid $105,000 for wages of production workers 6. Paid $113,000 to purchase equipment used in selling and adiministrative offices. 7. Recognized depreciation on the office equipment, The equipment was acquited on January 1, Year 2 It has a $13,000 salvage value and a five-year life. The amount of depreciation is computed as ((Cost - salvage) - useful lifel Specifically, (\$113,000 - ) $13,000)5=$20,000 8. Paid $125,000 to purchase manufacturing equipment. 9. Recognized depreclation on the manufacturing equipment. The equipment was acquired on January 1 , Year 2 . it has a $27,000 Salvage value and a seven year life. The amount of depreciation is computed as ((Cost - salvage) usefut life) Specifically. ($125,000$27,000)7=$14,000 10 Paid $49000 for rent and utility casts in the manufacturino farilfy 8. Paid $125,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, Year 2 . It has a $27.000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) - useful life]. Specifically. ($125,000$27,000)7=$14,000. 10. Paid $49,000 for rent and utility costs on the manufacturing facility 11. Paid $79,000 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 $251,000 from work in process inventory to finished goods. 13. Sold 930 eBook readers for $427,000 14. It cost Antioch $186,000 to make the eBook readers sold in Event 13 Required: 0. 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. Show how these events affect the balance sheet, income statement, and statement of cash flows by recording them in a hiorizontal financial statements mo the 5tatement of Cash Fows, indicate whether the item is an operating activity (OA), investing sctivity (IA), or financing activity (FA). If an item is not affex Prepare a schedule of cost of goods manufactured and sold for the year. (Amounts to be deducted should be indicated with a minus sign.) ANTIOCH COMPANY Income Statement For the Year Ended December 31, Year 2
