Lugar 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: $37,800 for both cash and common stock. In Year 2, Lugar worked on three jobs. The relevant direct operating costs follow Job Job 2 Job Total Direct Labor $3,000 1,400 4,100 $8,500 birect Materials $2,000 700 1,300 $4,500 Lugar's predetermined manufacturing overhead rate was $0.50 per direct labor dollar. Actual manufacturing overhead costs amounted to $4,200. Lugor 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 $9.250 cash and Job 2 for $4,930 cash. Lugar also paid $2,000 cash for seling and administrative expenses for the year. Lugar uses a just in time Inventory management system. Consequently, it does not have raw materials inventory. Row 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 on the expense category in the horizontal financial statements model c. Determine the gross margin for the year, Assets Cash Work in Process Finished Goods Manufacturing Overhead Equity Common Retained Stock Earnings 37.800 + Revenue Expense Not Incomo 37.800 + + 50 50 (50) 50 37.800 01. o. 50 = 37,800 50 0 50 (50)