Required a. Record the preceding events in a horizontal statements model. The first event for Year 1 has been recorded as an example. c. Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, 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.
Rooney Construction Company began operations on January 1, Year 1, when it acquired $10,000 cash from the issuance of common stock. During the year, Rooney purchased $2,700 of direct raw materials and used $2,500 of the direct materials. There were 106 hours of direct labor worked at an average rate of $8 per hour paid in cash. The predetermined
| Direct Materials | Direct Labor Hours | |||
| Job 1 | $ | 600 | 28 | |
| Job 2 | 1,100 | 46 | ||
| Job 3 | 800 | 32 | ||
The company paid $77 cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $341. Rooney completed Jobs 1 and 2 and sold Job 1 for $1,586 cash. The company incurred $150 of selling and administrative expenses that were paid in cash. Over- or underapplied overhead is closed to Cost of Goods Sold.
Required
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a. Record the preceding events in a horizontal statements model. The first event for Year 1 has been recorded as an example.
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c. Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.
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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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