Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufac
ID: 2581035 • Letter: Z
Question
Zachary Modems, Inc. acquired a subsidiary named Anywhere, Inc. (AI). AI manufactures a wireless modem that enables users to access the Internet through cell phones. The following trial balance was drawn from the accounts of the subsidiary:
The subsidiary completed the following transactions during 2017:
1. Paid $55,380 cash for direct raw materials.
2. Transferred $46,160 of direct raw materials to work in process.
3. Paid production employees $73,860 cash.
4. Applied $48,910 of manufacturing overhead costs to work in process.
5. Completed work on products that cost $150,410.
6. Sold products that cost $131,950 for $167,950 cash. Record the recognition of revenue in a row labeled 6a and the cost of goods sold in a row labeled 6b.
7. Paid $18,450 cash for selling and administrative expenses.
8. Actual overhead costs paid in cash amounted to $50,710.
9. Closed the Manufacturing Overhead account. The amount of over- or underapplied overhead was insignificant (immaterial).
10. Made a $4,580 cash distribution to the owners
REQUIRED
A. Prepare a schedule of cost of goods manufactured and sold.
Cash $ 184,600 Raw materials inventory 3,680 Work in process inventory 5,530 Finished goods inventory 6,450 Common stock $ 119,060 Retained earnings 81,200 Totals $ 200,260 $ 200,260Explanation / Answer
ANYWHERE, INC. Schedule of Cost of Goods Manufactured and Sold For Year Ended December 31, 2017 Beginning raw materials inventory 3680 Purchases 55380 Raw materials available for use 59060 Ending raw materials inventory 12900 Direct raw materials used 46160 Direct labor 73860 Manufacturing overhead 50710 Total manufacturing costs 170730 Beginning work in process inventory 5530 Total work in process inventory 176260 Ending work in process inventory 25850 Cost of goods manufactured 150410 Beginning finished goods inventory 6450 Cost of goods available for sale 156860 Ending finished goods inventory 24910 Cost of goods sold 131950
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