Gibson Construction Company began operations on January 1, Year 1, when it acquired $12,000 cash from the issuance of common stock. During the year, Gibson purchased $3,100 of direct raw materials and used $2,900 of the direct materials. There were 102 hours of direct labor worked at an average rate of $7 per hour paid in cash. The predetermined overhead rate was $4.00 per direct labor hour. The company started construction on three prefabricated buildings. The job cost sheets reflected the following allocations of costs to each building. Direct Labor Hours Direct Materials $ 700 1,200 1,000 Job 1 Job 2 Job 3 26 48 28 The company paid $59 cash for indirect labor costs. Actual overhead cost paid in cash other than indire or was $337. Gibson completed Jobs 1 and 2 and sold Job 1 for $1,666 cash. The company incurred $160 of selling and administrative expenses that were paid in cash. Over- or underapplied overhead is closed to Cost of Goods Sold. Required a. Record the preceding events in a horizontal statements model. The first event for Year 1 has been recorded as an example. c. Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant. d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1. Req A and C Reg D CGM Sched Reg D Inc Stmt Reg D Bal Sheet Record the preceding events in a horizontal statements model. Record the closing entry for over- or underapplied manufacturing overhead in the horizon amount is insignificant. The first event for Year 1 has been recorded as an example. (Record each cost category for the jobs in total. When entering cost raw materials, direct labor, and manufacturing overhead respectively into one entry for each job. Enter any decreases to account balances with a minus : Assets Raw Materials Manufacturing Overhead Cash Work In Process Finished Goods Equity Common Retained Stock Earnings 12,000 + Revenue Expenses = Net Income 12,000+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Req A and C Req D CGM Sched Req D Inc Stmt Req D Bal Sheet Prepare a schedule of cost of goo Req D Inc Stmt red and sold for Year 1. GIBSON CONSTRUCTION COMPANY Cost of Goods Manufactured and Sold for Year 1 Raw materials available Raw materials used Total manufacturing costs Total work in process inventory Cost of goods manufactured Goods available for sale Cost of goods sold Req A and C Reg D CGM Sched Req D Inc Stmt Req D Bal Sheet Prepare an income statement for Year 1. GIBSON CONSTRUCTION COMPANY Income Statement for Year 1 Req A and C Req D CGM Sched Req D Inc Stmt Req D Bal Sheet Prepare a balance sheet for Year 1. GIBSON CONSTRUCTION COMPANY Balance Sheet for Year 1 Assets Total assets Equity Total equity
