Job-order cost system Schiller Corporation was created on January 1, 2006, when it received a stockholder’s contribution of

$40,000. It purchased $7,900 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.)

The average wage rate is $16 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $7.50 per direct labor hour. Jobs 1 and 3 were completed during the year, and Job 1 was sold for $9,800. Schiller paid $1,400 for selling and administrative expenses. Actual factory overhead was $6,000.
Required

a. Record the preceding events in a horizontal statements model. In the Cash Flow column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA).
The first event for 2006 has been recorded as an example.
Cash  Raw M. MOH WIP  F. Goods C. Stk.  Ret. Ear.
40,000 NA NA NA NA 40,000 NA NA  NA NA 40,000 FA Assets Equity Rev. Exp. Net Inc. Cash Flow

b. Reconcile all subsidiary accounts with their respective control accounts.

c. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant. Close revenue and expense accounts.

d. Prepare a schedule of cost of goods manufactured and sold, an income statement, a balance sheet, and a statement of cash flows for 2006.