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Problem 10-27 Schedule of cost of goods manufactured and sold LO 10-3

[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, $674,000; Raw Materials Inventory, $52,000; Work in Process Inventory, $23,000; Finished Goods Inventory, $48,000; Common Stock, $601,000; and Retained Earnings, $196,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.

  1. Paid $32,000 of research and development costs.

  2. Paid $57,000 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 $65,000 for salaries of selling and administrative employees.

  5. Paid $104,000 for wages of production workers.

  6. Paid $66,000 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 $16,000 salvage value and a five-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($66,000 – $16,000) ÷ 5 = $10,000.

  8. Paid $168,000 to purchase manufacturing equipment.

  9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $28,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($168,000 – $28,000) ÷ 7 = $20,000.

  10. Paid $53,000 for rent and utility costs on the manufacturing facility.

  11. Paid $74,000 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 $244,000 from work in process inventory to finished goods.

  13. Sold 810 eBook readers for $426,000.

  14. It cost Antioch $170,100 to make the eBook readers sold in Event 13.ANTIOCH COMPANY Financial Statements Model Stockholders Equity Income Statement Event Work in Statement of Cash Flow Manufacturing Equipment Cash Raw 9Common Rovenuo ー! Expense Net Income MaterialsProcess+Finished Furniture Stock Earnings Inven 52,000+ (57,000) 674,000 23,000+ 48,000+ 601,000 196,000 Total 674,000 (5,000)+ 23,000 48,000 601,000+ 196,000

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Answer #1
ANTIOCH COMPANY
Financial Statements Model
Event No. Assets = Stockholders’ Equity Income Statement Statement of Cash Flow
Cash + Raw Materials + Work in Process Inventory + Finished Goods + Office Furniture + Manufacturing Equipment = Common Stock + Retained Earnings Revenue – Expense = Net Income
674,000 + 52,000 + 23,000 + 48,000 + + = 601,000 + 196,000 – =
1 -32000 + + + + + = + -32000 – 32000 = -32000 -32000 OA
2 -57000 + 57000 + + + + = + – = -57000 OA
3 + -95000 + 95000 + + + = + – = NA
4 -65000 + + + + + = + -65000 – 65000 = -65000 -65000 OA
5 -104000 + + 104000 + + + = + – = -104000 OA
6 -66000 + + + + 66000 + = + – = -66000 IA
7 + + + + -10000 + = + -10000 – 10000 = -10000 NA
8 -168000 + + + + + 168000 = + – = -168000 IA
9 + + 20000 + + + -20000 = + – = NA
10 -53000 + + 53000 + + + = + – = -53000 OA
11 -74000 + + + + + = + -74000 – 74000 = -74000 -74000 OA
12 + + -244000 + 244000 + + = + – = NA
13 426000 + + + + + = + 426000 426000 – = 426000 426000 OA
14 + + + -170100 + + = + -170100 – 170100 = -170100 NA
Total 481,000 + 14,000 + 51,000 + 121,900 + 56,000 + 148,000 = 601,000 + 270,900 426,000 – 351,100 = 74,900 -193,000 NC
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