Question

(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, $667,000; Raw Materials Inventory, $55,000; Work in Process Inventory, $29,000; Finished Goods Inventory, $53,000; Common Stock, $598,000; and Retained Earnings, $206,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions. 1. Paid $30,000 of research and development costs. 2. Paid $47,000 for raw materials that will be used to make eBook readers. 3. Placed $99,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $68,000 for salaries of selling and administrative employees. 5. Paid $97,000 for wages of production workers. 6. Paid $72,000 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 six-year life. The amount of depreciation is computed as ((Cost - selvage) + useful life). Specifically, ($72,000 – $12,000) 6 = $10,000. 8. Paid $141,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $24,000 salvage value and a nine-year life. The amount of depreciation is computed as ((Cost - salvage) + useful life). Specifically, ($141,000 – $24,000) + 9= $13,000. 10. Paid $46,000 for rent and utility costs on the manufacturing facility. 11. Paid $78,000 for inventory holding expenses for completed eBook readers (rental of warehouse spaco, salaries of warehouse personnel, and other general storage cost). 12. Completed and transferred eBook readers that had total cost of $252,000 from work in process inventory to finished goods. 13. Sold 960 eBook readers for $432,000. 14. It cost Antioch $153,600 to make the eBook readers sold in Event 13.

Answer 1

Please find below table useful to compute desired results: -

D н ANTIOCH COMPANY Income Statement For the year Ended December 31, 2018 Sale =B22 Cost of goods sold =E19 Gross profit =H4-H5 Selling Expenses =B11+B15+B20 Research and Development costs =B8 Net Income =H6-H7-HS A B 1 Particulars Given Amount 2 Cash 667000 3 Raw Materials 55000 4 WIP inventory 29000 5 Finished Goods inventory 53000 6 Common stock 598000 7 Retained earnings 206000 8 Transaction 1 30000 9 Transaction 2 47000 10 Transaction 3 99000 11 Transaction 4 168000 12 Transaction 5 97000 13 Transaction 6 72000 14 Transaction 7 12000 15 Depreciation =B13-B14)/6 16 Transaction 8 141000 17 Transaction 9 24000 18 Depreciation =(B16-B17)/9 19 Transaction 10 46000 20 Transaction 11 78000 21 Transaction 12 252000 22 Transaction 13 432000 23 Transaction 14 153600 E ANTIOCH COMPANY Schedule of COGM and Sold For the year ended December 31, 2018 Beginning raw materials inventory |=B3 Purchases =B9 Raw materials available =E4+E5 Ending raw materials inventory =E6-E8 Raw material used =B10 Labor =B12 Overhead =B18+B19 Total manufacturing costs =E8+E9+E10 Beginning WIP inventory =B4 Total WIP inventory =E11+E12 Ending WIP inventory =E13-E15 Cost of goods manufactured =B21 Beginning finished goods inventory 1=B5 Goods available =E15+E16 Ending finished goods inventory =E17-E19 Cost of goods sold =B23 ANTIOCH COMPANY Balance Sheet as of December 31, 2018 Assets Cash Raw material Work in Process Finished goods Office Furniture Manufacturing Equipment Total Assets =B2-B8-B9-B11-B12-B13-B16-B19-B20+B22 | =E7 =E14 =E18 =B13-B15 =B16-B18 =SUM(H15:H20) Stockholders' Equity: - Common Stock Retained Earnings Total stockholders' equity =B6 =B7+H9

End results would be as follows: -

B F H ANTIOCH COMPANY Income Statement For the year Ended December 31, 2018 Sale 432.000 Cost of goods sold 153,600 Gross profit 278.400 Selling Expenses 156.000 Research and Development costs 30.000 Net Income 92,400 А 1 Particulars Given 2 Cash 3 Raw Materials 4 WIP inventory 5 Finished Goods inventory 6 Common stock 7 Retained earnings 8 Transaction 1 9 Transaction 2 10 Transaction 3 11 Transaction 4 12 Transaction 5 13 Transaction 6 14 Transaction 7 15 Depreciation 16 Transaction 8 17 Transaction 9 18 Depreciation 19 Transaction 10 20 Transaction 11 21 Transaction 12 22 Transaction 13 23 Transaction 14 Amount 667.000 55,000 29.000 53,000 598,000 206.000 30.000 47.000 99.000 68,000 97.000 72.000 12.000 10,000 141.000 24.000 13.000 46,000 78.000 252.000 432,000 153.600 E ANTIOCH COMPANY Schedule of COGM and Sold For the year ended December 31, 2018 Beginning raw materials inventory 55,000 Purchases 47,000 Raw materials available 102,000 Ending raw materials inventory 3,000 Raw material used 99,000 Labor 97.000 Overhead 59.000 Total manufacturing costs 255.000 Beginning WIP inventory 29,000 Total WIP inventory 284.000 Ending WIP inventory 32,000 Cost of goods manufactured 252,000 Beginning finished goods inventory 53,000 Goods available 305,000 Ending finished goods inventory 151,400 Cost of goods sold 153,600 ANTIOCH COMPANY Balance Sheet as of December 31, 2018 Assets Cash 520,000 Raw material 3,000 Work in Process 32.000 Finished goods 151.400 Office Furniture 62.000 Manufacturing Equipment | 128.000 Total Assets 896,400 Stockholders' Equity: - Common Stock Retained Earnings Total stockholders' equity 598.000 298,400 896,400