Question
Munoz Manufacturing Corporation was started with the issuance of common stock for $70,000. It purchased $7,900 of raw materials and worked on three job orders
Munoz Manufacturing Corporation was started with the issuance of common stock for $70,000. It purchased $7,900 of raw materials and worked on three job orders during 2019 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.)
Direct Raw Materials Used | Direct Labor | |||||||
Job 1 | $ | 1,200 | $ | 2,100 | ||||
Job 2 | 2,200 | 3,900 | ||||||
Job 3 | 3,400 | 2,100 | ||||||
Total | $ | 6,800 | $ | 8,100 | ||||
Factory overhead is applied using a predetermined overhead rate of $0.60 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $11,160 cash. Munoz paid $400 for selling and administrative expenses. Actual factory overhead was $5,160.
Required
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Record the preceding events in a horizontal statements model. The first event for 2019 has been recorded as an example.
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Reconcile all subsidiary accounts with their respective control accounts.
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Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.
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Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2019.
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