Rooney Manufacturing started in Year 2 with the following account balances.

Cash	$5,700
Common stock	$4,877
Retained earnings	$5,300
Raw materials	$1,600
Work in process inventory	$820
Finished goods inventory (340 units @ $6.05 each)	$2,057

Transactions during Year 2

1. Purchased $2,920 of raw materials with cash.

2. Transferred $3,830 of raw materials to the production department.

3. Incurred and paid cash for 240 hours of direct labor @ $15.20 per hour.

4. Applied overhead costs to the Work in Process Inventory account. The predetermined overhead rate is $16.50 per direct labor hour.

5. Incurred actual overhead costs of $4,000 cash.

6. Completed work on 1,240 units for $5.60 per unit.

7. Paid $1,150 in selling and administrative expenses in cash.

8. Sold 1,240 units for $10,500 cash revenue (assume FIFO cost flow).

9. Rooney charges overapplied or underapplied overhead directly to Cost of Goods Sold.

Required

a. Record the preceding events in a horizontal statements model. The beginning balances are shown as an example.

b. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 2.

Prepare a schedule of cost of goods manufactured and sold for Year 2.

ROONEY MANUFACTURING COMPANY
Cost of Goods Manufactured and Sold
For the Year Ended December, Year 2
Raw materials available
Raw materials used
Total manufacturing costs
Total work in process inventory
Cost of goods manufactured
Cost of goods available for sale
Cost of goods sold

Prepare an income statement for Year 2.

ROONEY MANUFACTURING COMPANY
Income Statement
For the Year Ended December, Year 2

Prepare a balance sheet for Year 2.

ROONEY MANUFACTURING COMPANY
Balance Sheet
At December, Year 2
Assets
Total assets
Equity
Total equity