Loveland Manufacturing Company was started on January 1, 2018. The company was affected by the following events during its first year of operation:

1. Acquired $2,400 cash from the issue of common stock.

2. Paid $720 cash for direct raw materials.

3. Transferred $480 of direct raw materials to work in process.

4. Paid production employees $720 cash.

5. Paid $360 cash for manufacturing overhead costs.

6. Applied $294 of manufacturing overhead costs to work in process.

7. Completed work on products that cost $1,200.

8. Sold products that cost $960 for $1,680 cash.

9. Paid $480 cash for selling and administrative expenses.

10. Made a $60 cash distribution to the owners.

11. Closed the Manufacturing Overhead account.

Required

a. Record these events in a horizontal statements model. The first event is shown as an example.

b. Prepare a schedule of cost of goods manufactured and sold.

Transcribed Image Text:

Assets Equity Cash + MOH + Raw M. + WIP + F, Goods = C. St. + Ret. Ear. Rev. - Exp. = Net Inc. 2400 + NA + NA + NA + NA = 2,400 NA - NA = NA