Question

Waterways Problem 01 b1-b3 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 $276,000 Advertising Expenses 53,500 Cash 259,600 Depreciation—Factory Equipment 16,900 Depreciation—Office Equipment 2,400 Direct Labor 42,100 Factory Supplies Used 16,700 Factory Utilities 10,200 Finished Goods Inventory, November 30 68,700 Finished Goods Inventory, October 31 72,400 Indirect Labor 48,000 Office Supplies Expense 1,600 Other Administrative Expenses 71,300 Prepaid Expenses 41,000 Raw Materials Inventory, November 30 52,500 Raw Materials Inventory, October 31 38,100 Raw Materials Purchases 184,700 Rent—Factory Equipment 47,400 Repairs—Factory Equipment 4,600 Salaries 328,200 Sales Revenue 1,358,600 Sales Commissions 40,300 Work In Process Inventory October 31 53,100 Work In Process Inventory, November 30 42,200 A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule. WATERWAYS CORPORATION Cost of Goods Manufactured Schedule A) A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule. B)A list of accounts and their values are given above. From this information, prepare an income statement. C)A list of accounts and their values are given above. From this information, prepare a partial balance sheet for Waterways Corporation for the month of November.

Answer 1

A) Cost of Goods Manufactured
Description	Amount	Amount
Direct Material
Opening Inventory	$                 38,100
Add: Raw material Purchase	$             1,84,700
Less: Closing Raw Material	$                 52,500	$            1,70,300
Direct Labour		$                42,100
Factory Overhead
Indirect labour		$                48,000
Depreciation Factory Equipment		$                16,900
Factory Supplies		$                16,700
Factory utilities		$                10,200
Rent Factory Equipment		$                47,400
Repairs Factory Equipment		$                  4,600
Total Manufacturing Cost		$            3,56,200
Add: Opening Work in Process		$                53,100
Less: Closing Work in Process		$                42,200
Cost of Goods Manufactured		$            3,67,100

B) Income Statement
Description	Amount	Amount
Sales Revenue		$          13,58,600
Less: Cost Goods Sold
Opening Finished Goods	$              72,400
Cost Of goods Manufactured	$           3,67,100
Less: Closing Finished Goods	$              68,700	$            3,70,800
Gross Income		$            9,87,800
Operating Expenses
Salaries		$            3,28,200
Advertising Expense		$                53,500
Depreciation - Office Equipment		$                  2,400
Office Supplies Expenses		$                  1,600
Other administrative Expenses		$                71,300
Sales Commission		$                40,300
Net Income		$            4,90,500

Balance Sheet as on 30th November
Description	Amount	Description	Amount
		Cash	$             2,59,600
Net Income	$      4,90,500	Accounts Receivable	$             2,76,000
		Prepaid Expense	$                 41,000
		Inventory
		Finished Goods	$                 68,700
		Work in Process	$                 42,200
		Raw material	$                 52,500