Question

I want you to use the data shown and do part B, create a cost of manufacturing, cost of goods sold, and an income statement. No need to do the balance sheet, although there are balance sheet accounts listed. Do not use the balance sheet accounts in calculating Cost of goods sold, except for the beginning and ending inventories. Use spreadsheet or pencil & paper and upload to the assignment spot.

Waterways WP1 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 com- pany 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 di- rection 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, in- cluding 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 1,600 Office Supplies Expense 72,000 Other Administrative Expenses 41.250 Prepaid Expenses 52,700 38,000 184,500 47.000 Raw Materials Inventory, November 30 Raw Materials Inventory, October 31 Raw Materials Purchases Rent-Factory Equipment

Answer 1

1. Cost of Good Sold -

$ 38,000 $ 184,500 $ (52,700) $ 169,800 $ 42,000 Waterways Corporation Cost of Goods Sold Raw Material Inventory, October 31 Raw Material Purchases Raw Material Inventory, November 30 Raw Material Used Direct Labour Factory Overheads Depreciation - Factory Equipment Factory Supplies used Factory Utilities Indirect Labour Rent - Factory Equipment Repairs - Factory Equipment Total Manufacturing Cost Work in Progress Inventory, October 31 Work in Progress Inventory, November 30 Cost of Goods Manufactured Finished Goods Inventory, October 31 Cost of Goods Available for Sale Finished Goods Inventory, November 30 Cost of Goods Sold $ 16,800 $ 16,800 $ 10,200 $ 48,000 $ 47,000 $ 4,500 $ 143,300 $ 355,100 $ 52,700 $ (42,000) $365,800 $ 72,550 $438,350 $ (68,800) $369,550 + - + -

2. Income Statement -

Waterways Corporation Income Statement For the Month November Sales Revenue (-) Cost of Goods Sold Gross Profit $1,350,000 $ (369,550) $ 980,450 Administative Expenses: Salaries $325,000 Depreciation - Office Equipment $ 2,400 Office Supplies Expense $ 1,600 Other Administrative Expense $ 72,000 $ 401,000 Selling Expenses: Advertising Expense $ 54,000 Sales Commission $ 40,500 $ 94,500 Net Income $ 484,950