Meadowbrook Manufacturing started 2018 with the following account balances:
Cash.................................................................................. $7,000
Common stock....................................................................... 5,600
Retained earnings................................................................... 2,800
Raw materials inventory............................................................. 600
Work in process inventory........................................................... 440
Finished goods inventory (50 units @ $7.20/unit)............................... 360
Transactions during 2018
1. Purchased $1,600 of raw materials with cash.
2. Transferred $1,000 of raw materials to the production department.
3. Incurred and paid cash for 80 hours of direct labor at $15 per hour.
4. Applied overhead costs to Work in Process Inventory. The predetermined overhead rate is $15 per direct labor hour.
5. Incurred actual overhead costs of $1,300 cash.
6. Completed work on 300 units for $7.20 per unit.
7. Paid $400 in selling and administrative expenses in cash.
8. Sold 200 units for $3,000 cash revenues. (Assume LIFO cost flow.) Meadowbrook 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 balance sheet for 2018.

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Assets Equity Cash + MOH + Raw M. + WIP + F, Goods = C.Stk. + Ret. Ear. Rev. - Exp. = Net Inc. -NA NA 7,000 + NA + 600 + 440 + 360 = 5,600 + 2,800 NA