Record the preceding events in a horizontal statements

Question

P12-13A Baucom Manufacturing Corporation was started with the issuance of common stock for $50,000. It purchased $7,000 of raw materials and worked on three job orders during 2012 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.)

Direct raw material used Direct labor

Job 1 $1,000 $2,000

Job 2 $2,000 $4,000

Job 3 $3,000 $2,000

Total $6,000 $8,000

Factory overhead is applied using a predetermined overhead rate of $0.60 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $10,000 cash. Baucom paid $400 for selling and administrative expenses. Actual factory overhead was $4,300.

Required

a. Record the preceding events in a horizontal statements model. The first event for 2012 has been recorded as an example.

b. Reconcile all subsidiary accounts with their respective control accounts.

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 2012.

Answer 1

Please read the case of the Baucom Manufacturing Corporation illustrated in the problem above and as per the information, data and instructions provided in the question, respond to the following questions in accordance to the APA format. 1) Record the prior events in the horizontal statements model. The first event for the year 2012 has been recorded as an illustration. 2) Resolve all the subsidiary accounts by means of their respective control accounts. 3) Record the closing entry for over- or under applied manufacturing overhead in the horizontal statements model, supposing that the amount is not significant. 4) Create a schedule of cost of goods manufactured and sold, an income statement and a balance sheet for the year 2012.