Question

Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $670,000; Raw Materials Inventory, $55,000; Work in Process Inventory, $30,000; Finished Goods Inventory, $48,000; Common Stock, $589,000; and Retained Earnings, $214,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.

Paid $30,000 of research and development costs. Paid $59,000 for raw materials that will be used to make eBook readers.

Placed $95,000 of the raw materials cost into the process of manufacturing eBook readers.

Paid $76,000 for salaries of selling and administrative employees.

Paid $108,000 for wages of production workers.

Paid $86,000 to purchase equipment used in selling and administrative offices.

Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $16,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($86,000 – $16,000) ÷ 7 = $10,000.

Paid $176,000 to purchase manufacturing equipment.

Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $24,000 salvage value and a eight-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($176,000 – $24,000) ÷ 8 = $19,000.

Paid $56,000 for rent and utility costs on the manufacturing facility.

Paid $75,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost).

Completed and transferred eBook readers that had total cost of $247,000 from work in process inventory to finished goods.

Sold 930 eBook readers for $436,000.

It cost Antioch $148,800 to make the eBook readers sold in Event 13.

Schedule of Costs of Goods Manufactured and Sold

Beginning raw materials inventory	55,000
Purchases	59,000
Raw Materials Available	114,000
Ending Raw materials inventory	-19,000
Raw materials used	95,000
Labor	108,000
Overhead	?
Total manufacturing costs
Beginning work in process inventory
Ending Work in process inventory	?
Costs of goods manufactured
Beginning finished goods inventory	48,000
Goods available
Cost of goods sold	?

c-2. Prepare a formal income statement for the year. ANTIOCH COMPANY Income Statement For the Year Ended December 31, 2018 c-3. Prepare a balance sheet for the year. ANTIOCH COMPANY Balance Sheet As of December 31, 2018 Assets Total assets Stockholders' Equity Total stockholders' equity 0

Answer 1

ANTIOCH COMPANY Financial Statements Model Stockholders' Equity Assets Income Statement Work in Process Manufacturing Statement of Event No. Cash Raw MaterialsInventoryFinished Goods+Office Furniture Equipment Common StockRetained Earnings Revenue Net Income Cash Flow Expense 55,000 + 30.000 48.000+ 670,000 30000+ 59000+ 589.000+ 214.000 - -30000 OA -59000 OA 30000 30000= -30000 + 59000 -95000- + 95000 + NA -76000 OA -108000 OA 76000+ 76000 76000= -76000 - 108000+ -108000 + - -86000+ -86000 IA 86000+ 10000= 10000+ 10000 NA -10000 8-176000+ 176000 -176000 IA NA 19000+ 56000+ -19000 C + -56000 OA -75000 OA -56000+ -75000+ 10 + 75000- 11 75000 75000 247000 4 247000 NA 12 13 436000- 436000 436000 436000 OA 436000 148800 310,200 436.000-339,800 14 440,000 + -148800 + 146,200 -148800 -148800 NA 96,200-230,000 NC 19.000+ 61,000 76,000 589,000 157,000 Total Sheet58 Sheet59 Sheet50 Sheet57 Sheet51 Sheet52 Sheet53 Sheet54 Sheet55 Sheet56 e ENG 10:20 UK 04/06/2019

ANTIOCH COMPANY Income Statement ANTIOCH COMPANY ANTIOCH COMPANY schedule of cost of goods manufactured and sold for the year Balance Sheet As of December 31, 2018 For the Year Ended December 31, 2018 sales revenue For the year ended Dec 31, 2018 436,000 Beginning raw materials Inventory Purchases Assets 55,000 cost of goods sold gross margin selling and administration expense (339800-148800) 59000 Cash 148,800 440,000 Raw Materials Work in Process Inventory Finished Goods Office Furniture Raw materials available 287,200 114,000 19,000 191,000 Ending raw materials inventory Raw materia used -19,000 61,000 95,000 146,200 Labor net income 76.000 108000 96,200 Overhead (19000+56000) Total manufacturing costs Beginning work in process inventory Total work in process inventory Ending work in process inventory Cost of goods manufactured Beginning finished goods inventory Goods available Manufacturing Equipment 157,000 75000 278,000 30,000 Total assets 899,200 Stockholders' Equity 308,000 -61,000 247,000 48,000 295,000 Common Stock Retained Earnings 589,000 310.200 Total stockholders' equity 899,200 -146,200 148,800 Ending finished goods inventory Cost of goods sold Sheet55 Sheet57 Sheet58 Sheet59 Sheet50 Sheet51 Sheet52 Sheet53 Sheet54 Sheet56 ENG 10.20 04/06/2019