Rodman Corporation was created on January 1, 2014, when it recieved a stockholders contribution of $46,000. It purchased $10,500 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,) DirectRaw Materials Direct Labor Job 1 $4,000 $4,000 Job 2 $1,800 $4,800 Job 3 $3,200 $4,800 Total $9,000 $13,000 The average wage rate is $16 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $7.50 per direct labor hour. Job 1 was sold for $13,000. Rodman paid $1,400 for selling and administrative expenses. Actual factory overhead was $6,000.

a) Record the preceeding events in a horizontal statements model. The fist event for 2014 has been recorded as an example. Assets = Equity CASH + Raw M + MOH WIP + F.GOODS = C. STK + Ret Ear. Rev - Exp = Net Inc 46,000 NA NA NA NA 46,000 + NA NA NA NA

b) Reconcile all subsidary 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 2014.

In ex

Requirement a

Balance Sheet

Income Statement

Event Number

Cash

+

MOH

+

Raw Materials

+

Work in Process

+

Finished Inventory

=

Common Stock

+

Retained Earnings

Revenue

-

Expenses

=

Net Income

1. Issued common stock

-

2. Purchased raw materials

-

3. Raw materials used on Jobs 1, 2, 3

-

-

-

4. Direct labor charged to Jobs 1, 2, 3

-

-

-

5. Factory overhead applied to Jobs 1,2,3

-

-

-

6. Job 1 completed during period.

-

-

-

7. Job 3 completed during period.

-

-

-

8a. Job 1 sold - revenue

-

-

8b. Job 1 sold - cost of goods sold

-

-

-

9. Paid for selling & admin expenses.

-

-

10. Actual factory overhead incurred

-

11. Closed MOH balance to COGS.

-

-

-

Total

-

-

-

-

-

-

-

-

-

-

Subsidiary Accounts:

Items

Job 1

Job 2

Job 3

Direct materials

Direct labor

Manufacturing overhead

-

Total Product Cost

$ -

$ -

$ -

Statement of Cost of Goods Manufactured and Sold

Beginning raw materials inventory

$ -

Plus: Purchases

-

Raw materials available for use

-

Less: Ending raw materials inventory

-

Direct raw materials used

-

Direct labor

-

Overhead (actual)

-

Total manufacturing costs

-

Plus: Beginning WIP inventory

-

Total WIP

-

Less: Ending WIP

-

Cost of goods manufactured

-

Plus: Beginning finished goods inventory

-

Cost of goods available for sale

-

Less: Ending finished goods inventory

-

Cost of Goods Sold

-

Kearney Manufacturing Corporation

Income Statement

For Year Ended December 31, 2009

Sales revenue

$ -

Cost of goods sold

-

Gross margin

-

Selling and administrative expenses

-

Net income

$ -

Kearney Manufacturing Corporation

Balance Sheet

Decmeber 31, 2009

Assets:

Cash

-

Raw materials inventory

-

Work in process inventory

-

Finished goods inventory

-

Total assets

-

Liabilities

-

Stockholders' equity

Common stock

-

Retained earnings

-

Total stockholders' equity

-

Total Liabilities and stockholders' equity

-