Meadowbrook Manufacturing started Year 2 with the following account balances.

Cash - $7000

Common Stock - $5,600

Retained Earnings - $2,800

Raw Materials Inventory - $600

Work In Process Inventory - $440

Finished goods inventory (50 units @ $7.20/unit) - $360

Transactions during Year 2

Purchased $1600 of raw materials with cash and transferred $1000 of raw materials to the production department.

Incurred and paid cash for 80 hours of direct labor at $15 per hour, and then applied overhead costs to work in process invetory. The predetermined overhead rate is $15 per direct labor hour.

Incurred actual overhead costs of $1,300 cash, and completed work on 300 unitsfor $7.20 per unit.

Paid $400 in selling and adminstriative expenses in cash, and sold 200 units for $3000 cash revenues (assume LIFO cost flow)

Meadowbrook charges ocverapplied or underapplied overhead directly to Cost of Goods Sold.

REQUIRED:

Record the preceding events in a horizontal statements model. The beginning balances are shown as an example:

Balance Sheet Income Statement

Event # Assets = Equity

Cash + MOH + RAw Mat + WIP + F. Goods = C. Stock + Ret Earnings Rev - Exp = Net Inc

1. $7000 + NA + 600 + 440 + 360 = 5600 + 2800 NA - NA = NA

B: Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 2.