Question

Waterways Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private lawns. It has a centrally located factory in a U.S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that performs installation and warranty servicing in six metropolitan areas.
The mission of Waterways is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, perform rapid and responsible service, and serve the community and the employees who represent them in each community.
The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products.
Waterways was founded by Will Winkman, who is the company president and chief executive officer (CEO). Working with him from the company's inception is Will's brother, Ben, whose sprinkler designs and ideas about the installation of proper systems have been a major basis of the company's success. Ben is the vice president who oversees all aspects of design and production in the company.
The factory itself is managed by Todd Senter who hires his line managers to supervise the factory employees. The factory makes all of the parts for the irrigation systems. The purchasing department is managed by Helen Hines.
The installation and training division is overseen by vice president Henry Writer, who supervises the managers of the six local installation operations. Each of these local managers hires his or her own local service people. These service employees are trained by the home office under Henry Writer's direction because of the uniqueness of the company's products.
There is a small human resources department under the direction of Sally Fenton, a vice president who handles the employee paperwork, though hiring is actually performed by the separate departments. Teresa Totter is the vice president who heads the sales and marketing area; she oversees 10 well-trained salespeople.
The accounting and finance division of the company is run by Ann Headman, who is the chief financial officer (CFO) and a company vice president. She is a member of the Institute of Management Accountants and holds a certificate in management accounting. She has a small staff of accountants, including a controller and a treasurer, and a staff of accounting input operators who maintain the financial records.
A partial list of Waterways' accounts and their balances for the month of November follows.

Accounts Receivable $  275,000

Advertising Expenses 54,000

Cash 260,000

Depreciation—Factory Equipment 16,800

Depreciation—Office Equipment 2,400

Direct Labor 42,000

Factory Supplies Used 16,800

Factory Utilities 10,200

Finished Goods Inventory, November 30 68,800

Finished Goods Inventory, October 31 72,550\

Indirect Labor 48,000

Office Supplies Expense 1,600

Other Administrative Expenses 72,000

Prepaid Expenses 41,250

Raw Materials Inventory, November 30 : 052,700

Raw Materials Inventory, October 31 38,000

Raw Materials Purchases 184,500

Rent—Factory Equipment 47,000

Repairs—Factory Equipment 4,500

Salaries 325,000

Sales Revenue 1,350,000

Sales Commissions 40,500

Work in Process Inventory, October 31 52,700

Work in Process Inventory, November 30 42,000

Instructions
b. A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured, cost of goods sold and an income statement for Waterways Corporation for the month of November.

A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule. WATERWAYS CORPORATION Cost of Goods Manufactured Schedule $ $ $ v $ $ v TA

Answer 1

$ 52,700 Add less 169,800 42,000 Cost of Goods Manufactured For the month Ended November Beginning Work in Process Inventory, Oct 31 Direct Material: Beginning Inventory of Raw Material, Oct 31 $ 38,000 Material purchased $ 184,500 Raw material Available for use $ 222,500 Ending Inventory of Raw Material, Nov 30 $ 52,700 Direct Material used $ Direct Labor $ Factory Overhead: Depreciation expense - factory equipment 16,800 Factrory Supplies Used $ 16,800 Factory Utilities $ 10,200 Indirect Labor $ 48,000 Rent Expense - Factory $ 47,000 Repair - Factory $ 4,500 Total Factory Overhead $ Total Manufacturing cost incurred during period Total manufacturing cost to acount for Ending balance of Work in Process Inventory, Nov 30 Cost of Goods Manufactured $ 143,300 $ $ $ $ 355,100 407,800 42,000 365,800 less

Income Statement For the month Ended November Sales Revenue $ 1,350,000 less $ 72,550 $ 365,800 $ 438,350 $ 68,800 less $ $ 369,550 980,450 Cost of Goods Sold: Beginning Inventory of finished goods, Oct 31 Cost of goods manufactured Cost of finished goods available for sale Ending Finished Goods Inventory, Nov 30 Cost of Goods Sold Gross Profit Operating Expenses:- Selling Expense: Advertising Expense Sales Commission Total Selling Expense Administrative Expenses: Depreciation- Office Office Supplies Salaries Other administrative Expenses Total Administrative Expense Total Operating Expense Operating Profit $ $ 54,000 40,500 $ 94,500 $ 2,400 $ 1,600 $ 325,000 $ 72,000 $ 401,000 $ $ 495,500 484,950