Exercise 12-6A (Algo) Job-order costing in a manufacturing company LO 12-2 Perez Corporation makes custom-order furniture to meet the needs of persons with disabilities. On January 1, Year 2, the company had the following account balances: $88,000 for both cash and common stock. In Year 2, Perez worked on three jobs. The relevant direct operating costs follow. Job 1 Job 2 Job 3 Total Direct Labor $ 5,000 2,700 8,500 Direct Materials $ 5,100 1,900 $ 16,200 3,800 $ 10,800 Perez's predetermined manufacturing overhead rate was $0.40 per direct labor dollar. Actual manufacturing overhead costs amounted to $6,234. Perez paid cash for all costs. The company completed and delivered Jobs 1 and 2 to customers during the year. Job 3 was incomplete at the end of the year. The company sold Job 1 for $16,900 cash and Job 2 for $8,800 cash. Perez also paid $3,200 cash for selling and administrative expenses for the year. Perez uses a just-in-time inventory management system. Consequently, it does not have raw materials inventory. Raw materials purchases are recorded directly in the Work in Process Inventory account. Required a. Record the preceding events in a horizontal statements model. The first row shows beginning balances. b. Record the entry to close the amount of underapplied or overapplied overhead for the year to Cost of Goods Sold (in the expense category) in the horizontal financial statements model. c. Determine the gross margin for the year. Complete this question by entering your answers in the tabs below. Req A and B Req C a. Record the preceding events in a horizontal statements model. The first row shows beginning balances. b. Record the entry to close the amount of underapplied or overapplied overhead for the year to Cost of Goods Sold (in the expense category) in Note: Enter direct labor, direct materials, and applied overhead costs for each job individually. Enter any decreases to account balances with a m a. Record the preceding events in a horizontal statements model. The first row shows beginning balances. b. Record the entry to close the amount of underapplied or overapplied overhead for the year to Cost of Goods Sold (in the expense category) in the horizontal financial stateme Note: Enter direct labor, direct materials, and applied overhead costs for each job individually. Enter any decreases to account balances with a minus sign. Balance Sheet Assets Stockholders' Equity Cash Work in Process Finished Goods Manufacturing Overhead Liabilities Common Stock Retained Earnings Revenue 88,000 + + 88,000+ + + + 88,000 + 0+ 0+ 0 = 0+ Income Statement Net Expenses Income 88,000+ 0 0 0 = Req A and B Req C >