Blanding Manufacturing started in 2018 with the following account balances:

Cash.............................................................................................. $12,000

Common stock....................................................................................10,000

Retained earnings................................................................................ 10,000

Raw materials inventory......................................................................... 2,400

Work in process inventory....................................................................... 1,600

Finished goods inventory (320 units @ $12.50 each)....................................... 4,000

Transactions during 2018

1. Purchased $6,000 of raw materials with cash.

2. Transferred $7,500 of raw materials to the production department.

3. Incurred and paid cash for 180 hours of direct labor @ $32 per hour.

4. Applied overhead costs to the Work in Process Inventory account. The predetermined overhead rate is $33.00 per direct labor hour.

5. Incurred actual overhead costs of $6,000 cash.

6. Completed work on 1,200 units for $12.80 per unit.

7. Paid $2,800 in selling and administrative expenses in cash.

8. Sold 1,200 units for $19,200 cash revenue (assume FIFO cost flow).

9. Blanding charges over applied or under applied 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 2018.

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Assets Cash + MOH + Raw M. + WIP + F, Goods = C.Stk. + Ret. Ear. Rev. - Exp. = Net Inc. 12,000+ NA + 2,400 + 1,600 + 4,000 = 10,000 + 10,000 NA - NA = NA