Preston was created on January 1, 2018, when it received a stockholder’s contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders during the year. Data about these jobs follow. (Assume all transactions are for cash unless otherwise indicated.)
Direct Raw Materials Used Direct Labor
Job 1………………………………………………..$ 8,000…………………. $ 8,000
Job 2………………………………………………… 3,600…………………… 9,600
Job 3………………………………………………… 6,400…………………… 8,960
Total………………………………………………. $18,000…………………$26,560
The average wage rate is $32 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $15 per direct labor hour. Jobs 1 and 3 were completed during the year, and Job 1 was sold for $26,000. Preston paid $2,800 for selling and administrative expenses. Actual factory overhead was $12,000.
Required
a. Record the preceding events in a horizontal statements model. The first event for 2018 has been recorded as an example.
b. Reconcile all subsidiary accounts with their respective control accounts.
c. Record the closing entry for over- or under applied manufacturing overhead, assuming that the amount is insignificant.
d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a for 2018.
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com