PROBLEMS-SERIES B Problem 12-13B Job-order costing system Job-Order, Process, and Hybrid Costing Systems Preston Corporation was created on January 1, Year 1, when it received a stockholder's contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders during the year. Data about these jobs follow. (Assume all transactions are for cash unless otherwise indicated.) LO 12-2 Direct Raw Materials Used Direct Labor Job 1 $ 8,000 $ 8,000 Job 2 3,600 9,600 Job 3 Total 6,400 $18,000 8,960 $26,560 The average wage rate is $32 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $15 per direct labor hour. Jobs 1 and 3 were completed during the year, and Job 1 was sold for $26,000. Preston paid $2,800 for selling and administrative expenses. Actual factory overhead was $12,000. Required a. Record the preceding events in a horizontal statements model. The first event for Year 1 has been recorded as an example. Balance Sheet Income Statement Assets = Equity Cash + Raw M. + MOH + WIP + F. Goods = C. Stk. + Ret. Ear. Rev. - 92,000 + NA + NA + NA + = NA 92,000 + NA NA - Exp. = Net Inc. NA = NA b. Reconcile all subsidiary accounts with their respective control accounts. c. Record the closing entry for over- or underapplied manufacturing overhead, 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.