Benson Manufacturing started in Year 2 with the following account balances. Cash $5,000 Common stock Retained earnings 3,682 5,900 1,200 830 1,952 Raw materials inventory Work in process inventory Finished goods inventory (320 units @ $6.10 each) Transactions during Year 2 1. Purchased $2.920 of raw materials with cash. 2. Transferred $3,850 of raw materials to the production department. 3. Incurred and paid cash for 230 hours of direct labor @ $15.70 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 $3.900 cash. 6. Completed work on 1,300 units for $5.70 per unit. 7. Paid $1,040 in selling and administrative expenses in cash. 8. Sold 1,300 units for $10,400 cash revenue (assume FIFO cost flow). 9. Benson 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-1. Prepare a schedule of cost of goods manufactured and sold for Year 2 b-2. Prepare an Income statement for Year 2 b-3. Prepare a balance sheet for Year 2 Complete this question by entering your answers in the tabs below. Req A Req 82 Req 03 Record the preceding events in a horizontal statements model. The beginning balances are shown as an example. Note: Enter decreases to account balances with a minus sign. Event Number Beginning Balance 1. 2 3. 4. 5. 6. 7. Req B1 Sa 3b. 9. Total Cash $ 5.000+ $ 5,600 Manufacturing Overhead $ Assets Raw Materials + $ 1.200 + + Balance Sheet Work in Process $ 830 0+ S 1.200 + $ 830 Finished Goods $ 1,952 = $ 1,952 B = Liabilities $ 0. $ 0- $ 0 Net Income $ 0
Benson Manufacturing started in Year 2 with the following account balances. Cash $5,000 Common stock Retained earnings 3,682 5,900 1,200 830 1,952 Raw materials inventory Work in process inventory Finished goods inventory (320 units @ $6.10 each) Transactions during Year 2 1. Purchased $2.920 of raw materials with cash. 2. Transferred $3,850 of raw materials to the production department. 3. Incurred and paid cash for 230 hours of direct labor @ $15.70 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 $3.900 cash. 6. Completed work on 1,300 units for $5.70 per unit. 7. Paid $1,040 in selling and administrative expenses in cash. 8. Sold 1,300 units for $10,400 cash revenue (assume FIFO cost flow). 9. Benson 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-1. Prepare a schedule of cost of goods manufactured and sold for Year 2 b-2. Prepare an Income statement for Year 2 b-3. Prepare a balance sheet for Year 2 Complete this question by entering your answers in the tabs below. Req A Req 82 Req 03 Record the preceding events in a horizontal statements model. The beginning balances are shown as an example. Note: Enter decreases to account balances with a minus sign. Event Number Beginning Balance 1. 2 3. 4. 5. 6. 7. Req B1 Sa 3b. 9. Total Cash $ 5.000+ $ 5,600 Manufacturing Overhead $ Assets Raw Materials + $ 1.200 + + Balance Sheet Work in Process $ 830 0+ S 1.200 + $ 830 Finished Goods $ 1,952 = $ 1,952 B = Liabilities $ 0. $ 0- $ 0 Net Income $ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:**Benson Manufacturing Financial Data for Year 2**
**Account Balances at the Beginning of Year 2:**
- **Cash:** $5,600
- **Common Stock:** $5,682
- **Retained Earnings:** $1,200
- **Raw Materials Inventory:** $330
- **Work in Process Inventory:** $830
- **Finished Goods Inventory:**
- 320 units at $6.10 each: $1,952
**Transactions During Year 2:**
1. Purchased $2,920 of raw materials with cash.
2. Transferred $3,850 of raw materials to the production department.
3. Incurred and paid cash for 230 hours of direct labor at $18.50 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 $3,900 cash.
6. Completed an order of 1,300 units for $5.70 per unit.
7. Paid $1,040 in selling and administrative expenses with cash.
8. Sold 1,300 units for $10,400 cash revenue (assume FIFO cost flow).
9. Benson charges overapplied or underapplied overhead directly to Cost of Goods Sold.
**Requirements:**
a. Record the preceding events in a horizontal statements model. The beginning balances are shown as an example.
b1. Prepare a schedule of cost of goods manufactured and sold for Year 2.
b2. Prepare an income statement for Year 2.
b3. Prepare a balance sheet for Year 2.
**Horizontal Statements Model Table Explanation:**
- The table includes columns for various accounts under the balance sheet and income statement.
- **Assets** include Cash, Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods.
- **Liabilities** and **Stockholders’ Equity** include Common Stock and Retained Earnings.
- The **Income Statement** section includes Revenue, Expense, and Net Income.
- Each column provides a space for recording the beginning balances and transaction entries throughout the year.
**Note:** Enter decreases in account balances with a minus sign.
This educational exercise provides insight into the accounting process by tracking the transactions and financial statements of a manufacturing business across one fiscal year.
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Follow-up Question
![Required
a.c.&d. Record the preceding events in horizontal statements models for each of the three years. Close overapplied or underapplied
overhead to Cost of Goods Sold. In Year 1, the first event is shown as an example.
b.&d. Prepare a schedule of cost of goods manufactured and sold, an Income statement, and a balance sheet as of the close of
business on December 31, Year 1, Year 2 and Year 3.
Complete this question by entering your answers in the tabs below.
Year 1
Horizontal
Event
Number
1
2
3
4
5
6
Year 2
Horizontal
Record the preceding events in horizontal statements models for Year 1. Close overapplied or underapplied overhead to Cost of Goods Sold. The first event is shown as an example.
Note: Enter decreases to account balances with a minus sign.
Balance Sheet
7a
7b
8
9
Closing
Total
Cash
$ 3,000+
+
+
+
|+|
+
+
+
Year 3
Horizontal
Raw
Materials
$3,000+ $
+
+
|+
+
+1
+
+*
+
Cost of Goods
Schedule
Assets
Manufacturing
Overhead
Cost
+1
+
0+ S
+
+
|+ [
+
+1
0 +
Financial
Statements
Work in
Process
$
+
+
+
+
+
H
+
|+*
||+|
+
Finished
Goods
+1
+
0+ S
|=
=
=
|=
=
|-|
=
|=
|=
=
0]=
Liabilities
S
+
+ $
A
+
+
+
+
| +
Stockholders' Equity
0+
Common
Stock
$
3,000 +
< Year 1 Horizontal
+
| +
+
+
+1
|+|
Retaining
Earnings
3,000+ $
Revenue
0 S
Income Statement
-I
H:
H
J-L
Year 2 Horizontal >
Expenses = Net Income
HI
0-$
=
=
|=
=
|=
=
|=
|=
|=
|=|
0 =
$
0](https://content.bartleby.com/qna-images/question/69ae1dd6-3615-4a1a-a17e-22e8401cf941/e6bb1c70-55ca-4855-a61c-cc33d60a31c7/6l3nes_processed.png)
Transcribed Image Text:Required
a.c.&d. Record the preceding events in horizontal statements models for each of the three years. Close overapplied or underapplied
overhead to Cost of Goods Sold. In Year 1, the first event is shown as an example.
b.&d. Prepare a schedule of cost of goods manufactured and sold, an Income statement, and a balance sheet as of the close of
business on December 31, Year 1, Year 2 and Year 3.
Complete this question by entering your answers in the tabs below.
Year 1
Horizontal
Event
Number
1
2
3
4
5
6
Year 2
Horizontal
Record the preceding events in horizontal statements models for Year 1. Close overapplied or underapplied overhead to Cost of Goods Sold. The first event is shown as an example.
Note: Enter decreases to account balances with a minus sign.
Balance Sheet
7a
7b
8
9
Closing
Total
Cash
$ 3,000+
+
+
+
|+|
+
+
+
Year 3
Horizontal
Raw
Materials
$3,000+ $
+
+
|+
+
+1
+
+*
+
Cost of Goods
Schedule
Assets
Manufacturing
Overhead
Cost
+1
+
0+ S
+
+
|+ [
+
+1
0 +
Financial
Statements
Work in
Process
$
+
+
+
+
+
H
+
|+*
||+|
+
Finished
Goods
+1
+
0+ S
|=
=
=
|=
=
|-|
=
|=
|=
=
0]=
Liabilities
S
+
+ $
A
+
+
+
+
| +
Stockholders' Equity
0+
Common
Stock
$
3,000 +
< Year 1 Horizontal
+
| +
+
+
+1
|+|
Retaining
Earnings
3,000+ $
Revenue
0 S
Income Statement
-I
H:
H
J-L
Year 2 Horizontal >
Expenses = Net Income
HI
0-$
=
=
|=
=
|=
=
|=
|=
|=
|=|
0 =
$
0
Solution
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