Waterways Problem 01 b1-b3 (Part Level Submission)
Waterways Corporation is a private corporation formed for thepurpose of providing the products and the services needed toirrigate farms, parks, commercial projects, and private lawns. Ithas a centrally located factory in a U.S. city that manufacturesthe products it markets to retail outlets across the nation. Italso maintains a division that performs installation and warrantyservicing in six metropolitan areas.
The mission of Waterways is to manufacture quality parts that canbe used for effective irrigation projects that also conserve water.By that effort, the company hopes to satisfy its customers, performrapid and responsible service, and serve the community and theemployees who represent them in each community.
The company has been growing rapidly, so management is consideringnew ideas to help the company continue its growth and maintain thehigh quality of its products.
Waterways was founded by Will Winkman who is the company presidentand chief executive officer (CEO). Working with him from thecompany’s inception is Will’s brother, Ben, whose sprinkler designsand ideas about the installation of proper systems have been amajor basis of the company’s success. Ben is the vice president whooversees all aspects of design and production in the company.
The factory itself is managed by Todd Senter who hires his linemanagers to supervise the factory employees. The factory makes allof the parts for the irrigation systems. The purchasing departmentis managed by Helen Hines.
The installation and training division is overseen by vicepresident Henry Writer, who supervises the managers of the sixlocal installation operations. Each of these local managers hireshis or her own local service people. These service employees aretrained by the home office under Henry Writer’s direction becauseof the uniqueness of the company’s products.
There is a small human resources department under the direction ofSally 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 andmarketing area; she oversees 10 well-trained salespeople.
The accounting and finance division of the company is headed by AnnHeadman, who is the chief financial officer (CFO) and a companyvice president; she is a member of the Institute of ManagementAccountants and holds a certificate in management accounting. Shehas a small staff of accountants, including a controller and atreasurer, and a staff of accounting input operators who maintainthe financial records.
A partial list of Waterways’ accounts and their balances for themonth of November follows.
| Accounts Receivable | | $272,200 |
| Advertising Expenses | | 53,700 |
| Cash | | 261,100 |
| Depreciation—Factory Equipment | | 16,800 |
| Depreciation—Office Equipment | | 2,400 |
| Direct Labor | | 41,800 |
| Factory Supplies Used | | 16,600 |
| Factory Utilities | | 10,300 |
| Finished Goods Inventory, November 30 | | 69,200 |
| Finished Goods Inventory, October 31 | | 72,300 |
| Indirect Labor | | 48,300 |
| Office Supplies Expense | | 1,600 |
| Other Administrative Expenses | | 71,300 |
| Prepaid Expenses | | 41,500 |
| Raw Materials Inventory, November 30 | | 52,600 |
| Raw Materials Inventory, October 31 | | 37,700 |
| Raw Materials Purchases | | 183,100 |
| Rent—Factory Equipment | | 46,600 |
| Repairs—Factory Equipment | | 4,400 |
| Salaries | | 326,000 |
| Sales Revenue | | 1,357,500 |
| Sales Commissions | | 40,900 |
| Work In Process Inventory October 31 | | 52,700 |
| Work In Process Inventory, November 30 | | 42,200 |
A list of accounts and their values are given above. From thisinformation, prepare an income statement.
