Waterways Continuing Problem 15 (Part Level Submission)

Waterways Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private homes. It has a centrally located factory in a U.S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that provides installation and warranty servicing in six metropolitan areas.

The mission of Waterways is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, provide rapid and responsible service, and serve the community and the employees who represent them in each community.

The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products.

Waterways was founded by Will Winkman who is the company president and chief executive officer (CEO). Working with him from the companys inception was Wills brother, Ben, whose sprinkler designs and ideas about the installation of proper systems have been a major basis of the companys success. Ben is the vice president who oversees all aspects of design and production in the company.

The factory itself is managed by Todd Senter who hires his line managers to supervise the factory employees. The factory makes all of the parts for the irrigation systems. The purchasing department is managed by Hector Hines.

The installation and training division is overseen by vice president Henry Writer, who supervises the managers of the six local installation operations. Each of these local managers hires his or her own local service people. These service employees are trained by the home office under Henry Writers direction because of the uniqueness of the companys products.

There is a small Human Resources department under the direction of Sally Fenton, a vice president who handles the employee paperwork, though hiring is actually performed by the separate departments. Sam Totter is the vice president who heads the sales and marketing area; he oversees 10 well-trained salespeople.

The accounting and finance division of the company is headed by Abe Headman, who is the chief financial officer (CFO) and a company vice president; he is a member of the Institute of Management Accountants and holds a certificate in management accounting. He has a small staff of Certified Public Accountants, including a controller and a treasurer, and a staff of accounting input operators who maintain the financial records.

A partial list of Waterways accounts and their balances for the month of November 2012 follows.

Accounts Receivable	$275,000
Advertising Expenses	54,000
Cash	260,000
DepreciationFactory Equipment	16,800
DepreciationOffice Equipment	2,400
Direct Labor	42,000
Factory Supplies Used	16,800
Factory Utilities	10,200
Finished Goods Inventory, November 30	68,800
Finished Goods Inventory, October 31	72,550
Indirect Labor	48,000
Office Supplies Expense	1,600
Other Administrative Expenses	72,000
Prepaid Expenses	42,150
Raw Materials Inventory, November 30	52,700
Raw Materials Inventory, October 31	38,000
Raw Materials Purchases	184,500
RentFactory Equipment	47,000
RepairsFactory Equipment	4,500
Salaries	325,000
Sales	1,350,000
Sales Commissions	40,500
Work In Process Inventory October 31	52,700
Work In Process Inventory, November 30	42,000

A list of accounts and their values are given above. From this information, prepare an income statement.

WATERWAYS CORPORATION Income Statement For the Month of November, 2012
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues	$
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses	$
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
AddLess: Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses	$
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Administrative ExpensesAdvertising ExpensesCost of Goods Available for SaleCost of Goods ManufacturedDepreciationOffice EquipmentFinished Goods Inventory, November 1Finished Goods Inventory, November 30Office Supplies ExpenseOther Administrative ExpensesSalariesSales CommissionsSelling ExpensesTotal Administrative ExpensesTotal Selling Expenses
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues
Cost of Goods SoldDividendsExpensesGross ProfitIncome Before Income TaxesIncome From OperationsNet Income / (Loss)Net SalesOperating ExpensesOther Expenses and LossesOther Revenues and GainsRetained Earnings, November 1Retained Earnings, November 30SalesTotal ExpensesTotal Operating ExpensesTotal Revenues	$