Preston Corporation was created on January 1, Year 1, when it received a stockholder's contribution of...

  

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Preston Corporation was created on January 1, Year 1, when it received a stockholder's contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders during the year. Data. about these jobs follow. (Assume all transactions are for cash unless otherwise indicated.) Direct Raw Materials Used Direct Labor Job 1 Job 2 $ 8,000 $ 8,000 3,600 9,600 Job 3 Total 6,400 $18,000 8,960 $26,560 The average wage rate is $32 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $15 per direct labor hour. Jobs 1 and 3 were completed during the year, and Job 1 was sold for $26,000. Preston paid $2,800 for selling and administrative expenses. Actual factory overhead was $12,000. Required a. Record the preceding events in a horizontal statements model. The first event for Year I has been recorded as an example. Balance Sheet Assets Income Statement Equity Cash + Raw M. MOH + WIP F. Goods = 92,000 + NA + NA + NA + C. Stk. Ret. Ear. NA = 92,000 + Rev. - Exp. = Net Inc. NA NA NA = NA b. Reconcile all subsidiary accounts with their respective control accounts. c. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant. d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1. Preston Corporation was created on January 1, Year 1, when it received a stockholder's contribution of $92,000. It purchased $21,000 of raw materials and worked on three job orders during the year. Data. about these jobs follow. (Assume all transactions are for cash unless otherwise indicated.) Direct Raw Materials Used Direct Labor Job 1 Job 2 $ 8,000 $ 8,000 3,600 9,600 Job 3 Total 6,400 $18,000 8,960 $26,560 The average wage rate is $32 per hour. Manufacturing overhead is applied using a predetermined overhead rate of $15 per direct labor hour. Jobs 1 and 3 were completed during the year, and Job 1 was sold for $26,000. Preston paid $2,800 for selling and administrative expenses. Actual factory overhead was $12,000. Required a. Record the preceding events in a horizontal statements model. The first event for Year I has been recorded as an example. Balance Sheet Assets Income Statement Equity Cash + Raw M. MOH + WIP F. Goods = 92,000 + NA + NA + NA + C. Stk. Ret. Ear. NA = 92,000 + Rev. - Exp. = Net Inc. NA NA NA = NA b. Reconcile all subsidiary accounts with their respective control accounts. c. Record the closing entry for over- or underapplied manufacturing overhead, assuming that the amount is insignificant. d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for Year 1.

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