Reference no: EM132895134
Question - Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $665,000; Raw Materials Inventory, $52,000; Work in Process Inventory, $32,000; Finished Goods Inventory, $56,000; Common Stock, $591,000; and Retained Earnings, $214,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.
-Paid $31,000 of research and development costs.
-Paid $57,000 for raw materials that will be used to make eBook readers.
-Placed $90,000 of the raw materials cost into the process of manufacturing eBook readers.
-Paid $61,000 for salaries of selling and administrative employees.
-Paid $106,000 for wages of production workers.
-Paid $89,000 to purchase equipment used in selling and administrative offices.
-Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $19,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) ÷ useful life]. Specifically, ($89,000 - $19,000) ÷ 7 = $10,000.
-Paid $173,000 to purchase manufacturing equipment.
-Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $20,000 salvage value and a nine-year life. The amount of depreciation is computed as [(Cost - salvage) ÷ useful life]. Specifically, ($173,000 - $20,000) ÷ 9 = $17,000.
-Paid $46,000 for rent and utility costs on the manufacturing facility.
-Paid $73,000 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 $259,000 from work in process inventory to finished goods.
-Sold 930 eBook readers for $426,000.
-It cost Antioch $148,800 to make the eBook readers sold in Event 13.
Required -
1. Make a schedule of cost of goods manufactured and sold for the year.
2. Make a formal income statement for the year.
3. Make a balance sheet for the year.