Walton Corporation makes custom-order furniture to meet the needs of persons with disabilities. On January 1, Year 2, the company had the following account balances: $88,000 for both cash and common stock. In Year 2, Walton worked on three jobs. The relevant direct operating costs follow. Job 1 Job 2 Job 3. Total Direct Labor $ 4,500 2,400 8,800 Direct Materials $ 5,100 1,500 4,100 $ 15,700 $ 10,700 Walton's predetermined manufacturing overhead rate was $0.40 per direct labor dollar. Actual manufacturing overhead costs amounted to $6,022. Walton paid cash for all costs. The company completed and delivered Jobs 1 and 2 to customers during the year. Job 3 was incomplete at the end of the year. The company sold Job 1 for $16,800 cash and Job 2 for $8,700 cash. Walton also paid $3,200 cash for selling and administrative expenses for the year. Walton uses a just-in-time inventory management system. Consequently, it does not have raw materials inventory. Raw materials purchases are recorded directly in the Work in Process Inventory account. Required a. Record the preceding events in a horizontal statements model. The first row shows beginning balances. b. Record the entry to close the amount of underapplied or overapplied overhead for the year to Cost of Goods Sold (in the expense category) in the horizontal financial statements model. c. Determine the gross margin for the year. myniy Net Cash Work in Process Finished Goods Manufacturing Overhead Liabilities Common Stock Revenue Retained Earnings Expenses Income 88,000 + + + +++ + 88,000 + = + = + + = + + + + + + + ++ + + + + + + = + + + + + + + + + + + + + + + + + + + + + + + + + + + + = + + = + + + + + + + + + = + + = = = + + + + 88,000 + 0+ 0 + 0 = 0 + 88,000 + 0 0 0 = 0 Req A and B Req C Determine the gross margin for the year. Gross margin < Req A and B Req C >