Recording events in T-accounts and preparing financial statements Micoli Manufacturing Company was started on January 1, 2007, when it acquired $1,600 cash by issuing common stock. During its first year of operation, it purchased $480 of direct raw materials with cash and used $360 of the materials to make products. Micoli paid $640 of direct labor costs in cash. The company applied $464 of overhead costs to Work in Process Inventory. It made cash payments of $464 for actual overhead costs. The company completed products that cost $1,040 to make. It sold goods that had cost $824 to make for $1,360 cash. It paid $320 of selling and administrative expenses in cash.

Required

a. Open the necessary T-accounts and record the 2007 events in the accounts. Include closing entries.

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