Question

Required information [The following information applies to the questions displayed below.) Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $660,000; Raw Materials Inventory, $56,000; Work in Process Inventory, $32,000; Finished Goods Inventory, $60,000; Common Stock, $585,000; and Retained Earnings, $223,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions. 1. Paid $28,000 of research and development costs. 2. Paid $49.000 for raw materials that will be used to make eBook readers. 3. Placed $95,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $76,000 for salaries of selling and administrative employees. 5. Paid $104,000 for wages of production workers. 6. Paid $158,000 to purchase equipment used in selling and administrative offices. 7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $18,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) = useful life]. Specifically, ($158,000 - $18,000) = 7 = $20,000. 8. Paid $92,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $22,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) - useful life]. Specifically, ($92,000 - $22,000) = 7 = $10,000. 10. Paid $61,000 for rent and utility costs on the manufacturing facility. 11. Paid $76,000 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 $259,000 from work in process inventory to finished goods. 13. Sold 870 eBook readers for $421,000. 14. It cost Antioch $139,200 to make the eBook readers sold in Event 13.

Answer 1

To Start with the question and to provide you with the working I will start with the T Accounts as below:-

Cash Balance B/F By Research & Development Cost By Raw materials Inventory 6,60,000 28,000 To Sales Revenue 4,21,000 49,000 By Salaries and Wages 76,000 By WIP Inventory 1,04,000 By Office Equipment 1,58,000 By Manufacturing Equipment By Manufacturing Overheads 92,000 61,000 76,000 By Inventory Holding expenses By Balance C/F 4,37,000 10,81,000 10,81,000 Raw material inventory Balance B/F By WIP Inventory 56,000 95,000 To Cash 49,000 By Balance C/F 10,000 1,05,000 1,05,000 WIP Inventory By Finished Goods By Balance C/F Balance B/F 32,000 2,59,000 To Raw material Inventory 95,000 43,000 To Cash 1,04,000 To Manufacturing Overheads 71,000 3,02,000 3,02,000

Finished Goods Inventory Balance B/F 60,000 By Cost of Goods sold 1,39,200 To WIP Inventory 2,59,000 By Balance C/F 1,79,800 3,19,000 3,19,000 Manufacturing overhead To Accumulated Depreciation 10,000 By WIP Inventory 71,000 To Cash 61,000 71,000 71,000

Cost of Goods sold Statement

Particulars Beginning Raw materials Inventory Purchases Raw Materials Available Ending Raw materials Inventory Raw materials used Labor Overhead Total Manufacturing costs Beginning work in process Inventory Total work in process Inventory Ending work in process Inventory Cost of Goods Manufactured Beginning Finished Goods Inventory Goods Available Ending Finished Goods Inventory Cost of Goods Sold Amount Basis 56,000 Refer T Account 49,000 Refer T Account 1,05,000 Sum of above 2 10,000 Refer T Account 95,000 Refer T Account 1,04,000 Refer T Account 71,000 Refer T Account 2,70,000 Sum of above 3 32,000 Refer T Account 3,02,000 Refer T Account -43,000 Refer T Account 2,59,000 Sum of above 2 60,000 Refer T Account 3,19,000 Sum of above 2 -1,79,800 ReferT Account 1,39,200 Sum of above 2

Income Statement

Particulars Revenue |Sales Revenue Amount 4,21,000 Total Revenue 4,21,000 Expenses Cost of Goods Sold Research & Development Cost Depreciation Office Equipment Salaries and Wages Inventory holding expenses 1,39,200 28,000 20,000 76,000 76,000 Total Expenses Net Income 3,39,200 81,800

Balance Sheet

Amount Stockholders Equity 4,37,000 Common Stock 10,000 Retained Earnings 43,000 Opening Balance 1,79,800 Profit for the year Assets Amount Cash 5,85,000 Raw Material Inventory Work in Process Inventory Finished Goods Inventory Office Equipment Accumulated Depreciation Manufacturing Equipment Accumulated Depreciation 3,04,800 2,23,000 81,800 1,58,000 20,000 1,38,000 92,000 -10,000 82,000 8,89,800 Total Stockholders Equity Total Assets 8,89,800