Antioch Company makes eBook readers. The company had the following amounts at th

Question

Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $664,000; Raw Materials Inventory, $69,000; Work in Process Inventory, $22,000; Finished Goods Inventory, $54,000; Common Stock, $594,000; and Retained Earnings, $215,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.

Paid $28,000 of research and development costs.

Paid $66,000 for raw materials that will be used to make eBook readers.

Placed $90,000 of the raw materials cost into the process of manufacturing eBook readers.

Paid $64,000 for salaries of selling and administrative employees.

Paid $111,000 for wages of production workers.

Paid $75,000 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 $15,000 salvage value and a six-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($75,000 – $15,000) ÷ 6 = $10,000.

Paid $185,000 to purchase manufacturing equipment.

Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $23,000 salvage value and a nine-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($185,000 – $23,000) ÷ 9 = $18,000.

Paid $57,000 for rent and utility costs on the manufacturing facility.

Paid $73,000 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 $260,000 from work in process inventory to finished goods.

Sold 900 eBook readers for $424,000.

It cost Antioch $162,000 to make the eBook readers sold in Event 13.

c-1. Prepare a schedule of cost of goods manufactured and sold for the year. minus sign.) ANTIOCH COMPANY Schedule of Cost of Goods Manufactured and Sold For the Year Ended December 31, 2018 Beginning raw materials Inventory Purchases Raw materials available Ending raw materials inventory Raw materials used Labor Overhead 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 Ending finished goods inventory Cost of goods sold

Explanation / Answer

ANTIOCH COMPANY Schedule of Cost of goods manufactured and sold Beginning raw material inventory 69000 Add:Purchase of raw material 66000 Raw material available for manufacture 135000 Less: Ending raw material inventory 45000 Raw material used for manufacture 90000 Labor 111000 Overhead 75000 Total manufacturing costs 276000 Add: Beginning work in process inventory 22000 Total work in process inventory 298000 Less: Ending work in process inventory 38000 Cost of goods manufactured 260000 Add: Beginning finished goods inventory 54000 Cost of finished goods available for sale 314000 Less: Ending finished goods inventory 152000 Cost of goods sold 162000 Overhead Depreciation 18000 Rent and utility of manufacturing facility 57000 75000 ANTIOCH COMPANY Income statement for the year ending December 2018 Sales 424000 Cost of goods sold 162000 Gross profit 262000 Selling and administrative expenses    Research and developent costs 28000    Selling and administrative salaries 64000    Depreciation expese - office equipment 10000    Inventory holding expenses 73000 Total selling and administrative expenses 175000 Net operating income 87000 ANTIOCH COMPANY Balance sheet as at December 31, 2018 Assets Cash 429000 Raw material inventory 45000 Work in process inventory 38000 Finished good inventory 152000 Total current assets 664000 Manufacturing equipment 185000     Acumulated depreciation -18000 167000 Office equipment 75000     Acumulated depreciation -10000 65000 Total assets 896000 Stockholders' equity Common stock 594000 Retained earnings Beginning balance 215000 Net income 87000 Ending balance 302000 Total stockholders' equity 896000

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