Blanding Manufacturing started in 2018 with the following account balances:
Cash…………………………………………………………………………………. $12,000
Common stock…………………………………………………………………………10,000
Retained earnings…………………………………………………………………….. 10,000
Raw materials inventory………………………………………………………………. 2,400
Work in process inventory…………………………………………………………….. 1,600
Finished goods inventory (320 units @ $12.50 each)………………………………… 4,000
Transactions during 2018
1. Purchased $6,000 of raw materials with cash.
2. Transferred $7,500 of raw materials to the production department.
3. Incurred and paid cash for 180 hours of direct labor @ $32 per hour.
4. Applied overhead costs to the Work in Process Inventory account. The predetermined overhead rate is $33.00 per direct labor hour.
5. Incurred actual overhead costs of $6,000 cash.
6. Completed work on 1,200 units for $12.80 per unit.
7. Paid $2,800 in selling and administrative expenses in cash.
8. Sold 1,200 units for $19,200 cash revenue (assume FIFO cost flow).
9. Blanding charges over applied or under applied overhead directly to Cost of Goods Sold.
Required
a. Record the preceding events in a horizontal statements model. The beginning balances are shown as an example.
b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a for 2018.
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