The following accounting events affected Zachary Manufacturing Company during its first three years of operation. Assume that all transactions are cash transactions.

Transactions for Year 1

Started manufacturing company by issuing common stock for $4,000.

Purchased $1,240 of direct raw materials.

Used $730 of direct raw materials to produce inventory.

Paid $370 of direct labor wages to employees to make inventory.

Applied $270 of manufacturing overhead cost to Work in Process Inventory.

Finished work on inventory that cost $900.

Sold goods that cost $650 for $1,190.

Paid $380 for selling and administrative expenses.

Actual manufacturing overhead cost amounted to $217 for the year.

Transactions for Year 2

Acquired additional $1,700 of cash from common stock.

Purchased $1,280 of direct raw materials.

Used $1,220 of direct raw materials to produce inventory.

Paid $570 of direct labor wages to employees to make inventory.

Applied $310 of manufacturing overhead cost to Work in Process Inventory.

Finished work on inventory that cost $1,840.

Sold goods that cost $1,510 for $2,820.

Paid $440 for selling and administrative expenses.

Actual manufacturing overhead cost amounted to $360 for the year.

Transactions for Year 3

Paid a cash dividend of $700.

Purchased $1,400 of direct raw materials.

Used $1,120 of direct raw materials to produce inventory.

Paid $410 of direct labor wages to employees to make inventory.

Applied $330 of manufacturing overhead cost to work in process.

Finished work on inventory that cost $2,020.

Sold goods that cost $2,300 for $3,520.

Paid $630 for selling and administrative expenses.

Annual manufacturing overhead costs were $230 for the year.

Required

a.c.&d. Record the preceding events in horizontal statements models for each of the three years. Close overapplied or underapplied overhead to Cost of Goods Sold. Close appropriate accounts for Year 1, Year 2, and Year 3. In Year 1, the first event is shown as an example.

b.&d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet as of the close of business on December 31, Year 1, Year 2 and Year 3.