Question

Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $673,000; Raw Materials Inventory, $65,000; Work in Process Inventory, $30,000; Finished Goods Inventory, $61,000; Common Stock, $595,000; and Retained Earnings, $234,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions. 1. Paid $25,000 of research and development costs. 2. Paid $47,000 for raw materials that will be used to make eBook readers. 3. Placed $102,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $78,000 for salaries of selling and administrative employees. 5. Paid $104,000 for wages of production workers. 6. Paid $152,000 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 $12,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost - salvage) + useful life). Specifically, ($152,000-$12,000) + 7 = $20,000. 8. Paid $102,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $25,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost-salvage) + useful life). Specifically, ($102,000 - $25,000) + 7 = $11,000. 10. Paid $53,000 for rent and utility costs on the manufacturing facility. 11. Paid $73,000 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 $248,000 from work in process inventory to finished goods. 13. Sold 940 eBook readers for $438,000. 14. It cost Antioch $206,800 to make the eBook readers sold in Event 13.

Answer 1

ANTIOCH COMPANY Balance Sheet As of December 31, 2018 Assets Cash Raw Materials Work in Process Inventory Finished Goods Office Furniture Manufacturing Equipment 477,000 10,000 52,000 102,200 132,000 91,000 ANTIOCH COMPANY Schedule of cost of goods manufactured and sold for the year. For the year ended Dec 31, 2018 Beginning raw materials Inventory Purchases Raw materials available Ending raw materials inventory Raw materia used Labor Overhead (11000+53000) ** 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 **refer adjustment 9 & 10. 65,000 47000 112,000 - 10,000 102,000 104000 64000 270,000 30,000 300,000 -52,000 248,000 61,000 309,000 -102,200 206,800 864,200 Total assets Stockholders' Equity Common Stock Retained Earnings 595,000 269,200 Total stockholders' equity 864,200 ANTIOCH COMPANY Income Statement For the Year Ended December 31, 2018 sales revenue cost of goods sold gross margin selling and administration expense (402800-206800) 438,000 206,800 231,200 196,000 net income 35,200

Assets + + + + + + + + + + + + + + + + + + wokring ANTIOCH COMPANY Financial Statements Model = Stockholders' Equity Income Statement Work in Process Manufacturing Statement of Event No. Cash | + | Raw Materials + Inventory + Finished Goods + Office Furniture + Equipment 1= Common Stock + Retained Earnings Revenue - Expense = Net Income Cash Flow 673,000+ 65,000 + 30,000+ 61,000+ 595,000 + 234,000 -25000 + -25000 25000/= -25000 25000 OA - 47000 + 47000 + -47000 OA -102000 102000 NA -78000 + -78000 78000= -78000 -78000 OA - 104000 + 104000 + -104000 OA 6 -152000 + 152000 + -152000IA -20000+ 20000= -20000 NA 8 -102000 + -102000 IA 11000 + -11000 -53000 + 53000 + -53000 OA 11 -73000+ -73000 73000/= -73000 73000 OA 12 + -248000 + 248000 + NA 131 438000 + 438000 438000 - 438000 438000 OA -206800 + -206800 - 206800 = -206800 NA Total 477,000+ 10,000+ 52,000 + 102,200+ 132,000 + 91,000 = 595,000 + 269,200 438,000- 402,8001= 35,200 -196,000|NC| + + + + + + + + + + + 20000 600 VA + + + + + + + + + NA + + + + + + + + + + + + + Sheet510 Sheet511 Sheet512 Sheet513 Sheet514 Sheet515 Sheet516 Sheet517 Sheet518 ] ENG 18:41 UK 26/01/2020