Required information The following information applies to the questions displaye
ID: 2582535 • Letter: R
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Required information The following information applies to the questions displayed below Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $675,000; Raw Materials Inventory, $61,000; Work in Process Inventory, $23,000; Finished Goods Inventory, $48,000; Common Stock, $585,000; and Retained Earnings, $222,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions 1. Paid $30,000 of research and development costs 2. Paid $62,000 for raw materials that will be used to make eBook readers. 3. Placed $90,000 of the raw materials cost into the process of manufacturing eBook readers. 4. Paid $67,000 for salaries of selling and administrative employees. 5. Paid $91,000 for wages of production workers. 6. Paid $93,000 to purchase equipment used in selling and administrative offices 7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $13,000 salvage value and a eight-year life. The amount of depreciation is computed as ((Cost - salvage) + useful life) Specifically. ($93,000-$13,000)+8 $10,000 8. Paid $172,000 to purchase manufacturing equipment. 9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. it has a $28,000 salvage value and a eight-year life. The amount of depreciation is computed as ((Cost - salvage) useful ife, Specifically. ($172,000- $28,000)+8 $18,000 0. Paid $53,000 for rent and utility costs on the manufacturing facility. 11. Paid $79,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost). 12. Completed and transferred eBook readers that had total cost of $244,000 from work in process inventory to finished goods. 13. Sold 840 eBook readers for $439,000 14. It cost Antioch $159,600 to make the eBook readers sold in Event 13.Explanation / Answer
Answer c-1. Antioch Company Schedule of Cost of Goods manufactured And Sold For the Year Ended Dec 31, 2018 Begininng Raw Materials Inventory 61,000 Purchases 62,000 Raw Materials Avaialable 123,000 Ending Raw Materials Inventory (33,000) Raw Materials Used 90,000 Labor 91,000 Overhead 150,000 Total Manufacturing Costs 331,000 Begininng WIP Inventory 23,000 Total WIP Inventory 354,000 Ending WIP Inventory (110,000) Cost of Goods Manufactured 244,000 Beginning Finished Goods Inventory 48,000 Goods Available 292,000 Ending Finished Goods Inventory (132,400) Cost of Goods Sold 159,600 Overhead Depreciation - Manf. Equipment 18,000 Rent & Utility Costs - Manufacturing Facility 53,000 Inventory Holding Costs 79,000 Total Overhead 150,000 Answer c-2. Antioch Company Income Statement For the Year Ended Dec 31, 2018 Sales 439,000 Cost of Goods Sold 159,600 Gross Margin 279,400 Less: Operating Expenses Research & Development Costs 30,000 Salaries - Selling & Admn. Exp. 67,000 Depreciation - Office Equipment 10,000 Net Profit 172,400 Answer c-3. Antioch Company Balance Sheet As of Dec 31, 2018 Assets Current Assets Cash 467,000 Inventory: Raw Material 33,000 WIP 110,000 Finished Goods 132,400 275,400 742,400 Property, Plant & Equipment Office Equipment 93,000 Less: Accumulated Dep. (10,000) 83,000 Manufacturing Equipment 172,000 Less: Accumulated Dep. (18,000) 154,000 237,000 Total Assets 979,400 Liabilities & Stockholders' Equity Liabilities - Stockholders' Equity Common Stock 585,000 Retained Earnings 394,400 Total Stockholders' Equity 979,400 Total Liabilities & Stockholders' Equity 979,400
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