Vernon Construction Company began operations on January 1, 2019, when it acquired $14,000 cash from the issuance of common stock. During the year, Vernon purchased $2,500 of direct raw materials and used $2,400 of the direct materials. There were 106 hours of direct labor worked at an average rate of $6 per hour paid in cash. The predetermined overhead rate was $3.00 per direct labor hour. The company started construction on three prefabricated buildings. The job cost sheets reflected the following allocations of costs to each building:

	Direct Materials			Direct Labor Hours
Job 1	$	400		26
Job 2		1,000		52
Job 3		1,000		28

The company paid $68 cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $236. Vernon completed Jobs 1 and 2 and sold Job 1 for $1,254 cash. The company incurred $140 of selling and administrative expenses that were paid in cash. Over- or underapplied overhead is closed to Cost of Goods Sold.

Required

Record the preceding events in a horizontal statements model. The first event for 2019 has been recorded as an example.

Reconcile all subsidiary accounts with their respective control accounts.

Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.

Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2019.