Natalie Nelson started Nelson Frame Company (NFC) to make a unique picture frame that she had invented. Ms. Nelson employs part-time workers as she needs them. Accounting information relevant to NFCs first year of operation follows. Assume all transactions are cash transactions unless otherwise stated. Events 1 through 11 pertain to January, the first month of NFCs operation: 1. Issued $5,000 of common stock. 2. Purchased $1,200 of direct raw materials. 3. Used $900 of direct raw materials. 4. There were 120 direct labor hours worked during the month. NFC paid direct labor production workers $8 per hour. 5. Paid $1,560 for the annual insurance premium on the manufacturing facility. 6. Purchased $160 of production supplies. 7. Paid $610 for rental of manufacturing facility and equipment. 8. NFC expects total overhead costs for the year to be $12,750. It expects to use 1,500 direct labor hours during the year. Calculate an overhead rate and apply the appropriate amount of overhead costs for the month to work in process. 9. Completed work on the 576 picture frames that were started during the month. Transfer the manufacturing costs from the work in process account to the finished goods account. Calculate the cost per frame produced during the month. 10. Sold 500 frames at a price of $9 per frame. 11. Paid $490 for general, selling, and administrative expenses. Events 12 through 23 pertain to the remaining 11 months of the first year: 12. NFC acquired an additional $40,000 by issuing common stock. 13. Purchased $12,500 of direct raw materials. 14. Used $11,600 of direct raw materials. 15. Paid direct labor production workers $8 per hour for 1,310 hours of work. 16. Applied the appropriate amount of overhead cost to work in process inventory. 17. Purchased $500 of production supplies. 18. Paid $8,900 for rental of manufacturing facility and equipment. 19. The company transferred 5,200 additional frames that cost $5 each from work in process to finished goods. 20. Sold 4,900 frames at a price of $9 each. 21. Paid $5,600 for general, selling, and administrative expenses. 22. There was $150 of production supplies on hand at the end of the year. 23. Determine whether overhead is over- or under-applied. Close the manufacturing overhead account to cost of goods sold. Required a. Record the events in a horizontal financial statements model. b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for NFCs first year of operation