Perez Manufacturing Corporation was started with the issuance of common stock for $60,000. It purchased $7,700 of raw materials and worked on three job orders during Year 1 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.) Job 1 Job 2 Job 3 Total Direct Raw Materials Used $1,400 2,000 3,400 $6,800 Direct Labor $1,900 3,900 2,000 $7,800 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 $10,900 cash. Perez paid $500 for selling and administrative expenses. Actual factory overhead was $5,280. 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. Manufacturing Assets Raw Material Cash + Overhead Work In Process * Finished Goods Revenue - Expense Equity Common Retained Stock Earnings 60,000 + = Net Income - 60,000 + | (7,700)| | 7,700 + ol1 + 0 | + | | =[ =11 + + | | + + 10 1 + 0 110 = 10 1 10 | | 1000 -10 ||0 1 + + 10 +10 +1 +10 J+o + 10 | | + 0 10 Jo Jo 10 + 10 | | + + | 100-000 | o 0 + + 1000 | | + + 10 1 + = | | + + | + | + | + | + | + | + | + | + | + | + | + | + | + | + | +|+|+| I LOO 0 + +10 0 0 + + 10 + 10 0 10 + | + | +| | + 10 +- | 10 + | 11 + | + + - + | 01000 +- + | +- | | + | 0 10 0 + | + 52,300 + 7,700 + 60,0000 + + | | PEREZ MANUFACTURING CORPORATION Cost of Goods Manufactured and Sold for Year 1 Raw materials available Raw materials used Total manufacturing costs Total work in process inventory Cost of goods manufactured Goods available Cost of goods sold $ 0 PEREZ MANUFACTURING CORPORATION Income Statement for Year 1 PEREZ MANUFACTURING CORPORATION Balance Sheet for Year 1 Assets Total assets Equity Total equity Perez Manufacturing Corporation was started with the issuance of common stock for $60,000. It purchased $7,700 of raw materials and worked on three job orders during Year 1 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.) Job 1 Job 2 Job 3 Total Direct Raw Materials Used $1,400 2,000 3,400 $6,800 Direct Labor $1,900 3,900 2,000 $7,800 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 $10,900 cash. Perez paid $500 for selling and administrative expenses. Actual factory overhead was $5,280. 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. Manufacturing Assets Raw Material Cash + Overhead Work In Process * Finished Goods Revenue - Expense Equity Common Retained Stock Earnings 60,000 + = Net Income - 60,000 + | (7,700)| | 7,700 + ol1 + 0 | + | | =[ =11 + + | | + + 10 1 + 0 110 = 10 1 10 | | 1000 -10 ||0 1 + + 10 +10 +1 +10 J+o + 10 | | + 0 10 Jo Jo 10 + 10 | | + + | 100-000 | o 0 + + 1000 | | + + 10 1 + = | | + + | + | + | + | + | + | + | + | + | + | + | + | + | + | + | +|+|+| I LOO 0 + +10 0 0 + + 10 + 10 0 10 + | + | +| | + 10 +- | 10 + | 11 + | + + - + | 01000 +- + | +- | | + | 0 10 0 + | + 52,300 + 7,700 + 60,0000 + + | | PEREZ MANUFACTURING CORPORATION Cost of Goods Manufactured and Sold for Year 1 Raw materials available Raw materials used Total manufacturing costs Total work in process inventory Cost of goods manufactured Goods available Cost of goods sold $ 0 PEREZ MANUFACTURING CORPORATION Income Statement for Year 1 PEREZ MANUFACTURING CORPORATION Balance Sheet for Year 1 Assets Total assets Equity Total equity
