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 $$3,000$ of direct raw materials and used $$2,700$ of the direct materials. There were $106$

hours of direct labor worked at an average rate of $$7$ per hour paid in cash. The predetermined overhead rate was $$2\mathrm{.}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.

The company paid $$60$ cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $$136.$ Gibson

completed Jobs $1$ and $2$ and sold Job $1$ for $$1,382$ cash. The company incurred $$140$ 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$-1.$ Prepare a schedule of cost of goods manufactured and sold for Year $1.$

d$-2.$ Prepare an income statement for Year $1.$

d$-3.$ Prepare a balance sheet for Year $1.$Gibson Construction Company began operations on January $1,$ Year $1,$ when it acquired $$12,000$ cash from the issuance of common stock. During the year, Gibson purchased $$3,000$ of direct raw materials and used $$2,700$ of the direct materials. There were $106$ hours of direct labor worked at an average rate of $$7$ per hour paid in cash. The predetermined overhead rate was $$2\mathrm{.}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 Materials Direct Labor Hours

Job $1$ $ $50028$

Job $21,20052$

Job $31,00026$

The company paid $$60$ cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $$136.$ Gibson completed Jobs $1$ and $2$ and sold Job $1$ for $$1,382$ cash. The company incurred $$140$ 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$-1.$ Prepare a schedule of cost of goods manufactured and sold for Year $1.$

d$-2.$ Prepare an income statement for Year $1.$

d$-3.$ Prepare a balance sheet for Year $1.$