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 headed 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 16,800 2,400 42.000 16,800 10,200 68,800 72.550 48,000 1,600 72,000 Depreciation-Factory Equipment Depreciation - Office Equipment Direct Labor Factory Supplies Used Factory Utilities Finished Goods Inventory, November 30 Finished Goods Inventory, October 31 Indirect Labor Office Supplies Expense Other Administrative Expenses Prepaid Expenses Raw Materials Inventory, November 30 Raw Materials Inventory, October 31 Raw Materials Purchases Rent-Factory Equipment Repairs-Factory Equipment Salaries Sales Revenue Sales Commissions Work In Process Inventory October 31 Work In Process Inventory, November 30 41,250 52,700 38,000 184,500 47,000 4,500 325,000 1,350,000 40,500 52,700 42,000

Based on the information given, construct an organizational chart of Waterways Corporation.

And then, From this information, also prepare a cost of goods manufactured schedule, an income statement, and a partial balance sheet for Waterways Corporation for the month of November.

Answer 1

Organisation Chart of Waterways Corporation:

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Waterways Corporation
Schedule of Cost of Goods manufatured
Item		$
Materials used		169800
Opening	38000
Purchases	184500
Less: Closing	52700
Direct Labour		42000
Factory Overhead		143300
Supplies	16800
Utilities	10200
Indirect Labour	48000
Dep - factory equi.	16800
Rent - factory equi.	47000
Repairs - factory equi.	4500
Total Manufacturing Cost		355100
Add: opening WIP		52700
Less: closing WIP		42000
Cost of goods manufactured in November	365800

Waterways Corporation
Income Statement for November
Item		$
Sales Revenue		1350000
Cost of Goods Sold		369550
Opening Stock	72550
Add: Goods manufactured	365800
Less: Closing Stock	68800
Gross Income		980450
Expenses		495500
Advertising	54000
Dep. - Office equipment	2400
Office supplies	1600
Other administrative	72000
Salaries	325000
Sales Commission	40500
Net Income		484950

Waterways Corporation
Partial Balancesheet as on 30 November
Item		$
Assets
Cash			260000
Accounts Receivable			275000
Inventory:			163500
Finished Goods		68800
Raw Materials		52700
WIP		42000
Prepaid Expenses			41250
Total Assets
Liabilities
Common Stock
Retained Earnings
For November	484950
Total SHE
Other Liabilities
Total Liabilities