Perez Construction Company began operations on January 1, Year 1, when it acquired $12,000 cash from the issuance of common stock. During the year, Perez purchased $2,800 of direct raw materials and used $2,600 of the direct materials. There were 108 hours of direct labor worked at an average rate of $7 per hour paid in cash. The predetermined overhead rate was $2.00 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 | $ | 700 | | 30 |
| Job 2 | | 1,000 | | 48 |
| Job 3 | | 900 | | 30 |
| |
The company paid $50 cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $154. Perez completed Jobs 1 and 2 and sold Job 1 for $1,620 cash. The company incurred $160 of selling and administrative expenses that were paid in cash. Over- or underapplied overhead is closed to Cost of Goods Sold.
Required
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a. Record the preceding events in a horizontal statements model. The first event for Year 1 has been recorded as an example.
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c. 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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d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.
Perez Construction Company began operations on January 1, Year 1, when it acquired $12,000 cash from the issuance of common stock. During the year, Perez purchased $2,800 of direct raw materials and used $2,600 of the direct materials. There were 108 hours of direct labor worked at an average rate of $7 per hour paid in cash. The predetermined overhead rate was $2.00 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. Job 1 Job 2 Job 3 Direct Direct Labor Materials Hours $ 700 30 1,000 48 900 30 The company paid $50 cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $154. Perez completed Jobs 1 and 2 and sold Job 1 for $1,620 cash. The company incurred $160 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. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1. Complete this question by entering your answers in the tabs below. Reg A and c Reg D CGM Sched Req D Inc Stmt Reg D Bal Sheet Record the preceding events in a horizontal statements model. Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant. The first event for Year 1 has been recorded as an example. (Record each cost category for the jobs in total. When entering cost data, please combine all job costs of direct raw materials, direct labor, and manufacturing overhead respectively into one entry for each job. Enter any decreases to account balances with a minus sign.) Show less Assets Raw Materials Manufacturing. Overhead Cash Work In Process Equity Common Retained Stock Earnings Finished Goods Revenue Expenses = Net Income 12,000+ - - 12.000 + = + + + + + + 1+1 + + + 1+1 - + - + 1+1 + + 1+1 I- -1 + + 1+1 + + 12,000+ 0 0+ 0 0 = 12,000+ 0 01- 0 = Complete this question by entering your answers in the tabs below. Reg A and C Reg D CGM Sched Reg D Inc Stmt Reg D Bal Sheet Prepare a schedule of cost of goods manufactured and sold for Year 1. PEREZ CONSTRUCTION COMPANY Cost of Goods Manufactured and sold for Year 1 Raw materials available 0 Raw materials used Total manufacturing costs Total work in process inventory 0 Cost of goods manufactured Goods available for sale 0 Cost of goods sold s 0 Complete this question by entering your answers in the tabs below. Reg D Bal Sheet Req A and Reg DCGM Reg D Inc Sched Strnt Prepare an income statement for Year 1. PEREZ CONSTRUCTION COMPANY Income Statement for Year 1 $ Complete this question by entering your answers in the tabs below. Reg D Bal Sheet Req D CGM Req D Inc Reg A and C Sched Stmt Prepare a balance sheet for Year 1. PEREZ CONSTRUCTION COMPANY Balance Sheet for Year 1 Assets Total assets $ 0 Equity Total equity S
