Question

Wilson Manufacturing started in 2014 with the following account balances.
Cash ..................... $6,000
Common stock ................. 5,000
Retained earnings ................ 5,000
Raw materials inventory .............. 1,200
Work in process inventory .............. 800
Finished goods inventory (320 units @ $6.25 each) .... 2,000
Transactions during 2013
1. Purchased $3,000 of raw materials with cash.
2. Transferred $3,750 of raw materials to the production department.
3. Incurred and paid cash for 180 hours of direct labor @ $16 per hour.
4. Applied overhead costs to the Work in Process Inventory account. The predetermined overhead rate is $16.50 per direct labor hour.
5. Incurred actual overhead costs of $3,000 cash.
6. Completed work on 1,200 units for $6.40 per unit.
7. Paid $1,400 in selling and administrative expenses in cash.
8. Sold 1,200 units for $9,600 cash revenue (assume FIFO cost flow).
Wilson charges overapplied or underapplied 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 for2014.


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  • CreatedFebruary 07, 2014
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