Adams Manufacturing started in 2018 with the following accountbalances:

Cash	$	5,300
Common stock		4,494
Retained earnings		5,000
Raw materials inventory		1,400
Work in process inventory		850
Finished goods inventory (360 units @ $5.40 each)		1,944

  

Transactions during 2018

1. Purchased $2,980 of raw materials with cash.

2. Transferred $3,780 of raw materials to the productiondepartment.

3. Incurred and paid cash for 180 hours of direct labor @ $15.40per hour.

4. Applied overhead costs to the Work in Process Inventory account.The predetermined overhead rate is $16.50 per direct laborhour.

5. Incurred actual overhead costs of $3,100 cash.

6. Completed work on 1,300 units for $5.50 per unit.

7. Paid $1,160 in selling and administrative expenses in cash.

8. Sold 1,300 units for $9,800 cash revenue (assume FIFO costflow).

9. Adams charges overapplied or underapplied overhead directly toCost of Goods Sold.

Required

1. Record the preceding events in a horizontal statements model.The beginning balances are shown as an example.

2. Prepare a schedule of cost of goods manufactured and sold, anincome statement, and a balance sheet for 2018.

• Req A
• Req B CGM Sched
• Req B Inc Stmt
• Req B Bal Sheet

Record the preceding events in a horizontal statementsmodel. The beginning balances are shown as an example. (Enterdecreases to account balances with a minus sign.)

Assets = Equity Event No. Cash + Manufacturing Overhead + Raw Materials + Work in Process + Finished Goods = Common Stock + Retained Earnings Revenue – Expense = Net Income B.B. $5,300 + + $1,400 + $850 + $1,944 = $4,494 + $5,000 – = 1. + + + + = + – = 2. + + + + = + – = 3. + + + + = + – = 4. + + + + = + – = 5. + + + + = + – = 6. + + + + = + – = 7. + + + + = + – = 8a. + + + + = + – = 8b. + + + + = + – = 9. + + + + = + – = Total $5,300 + $0 + $1,400 + $850 + $1,944 = $4,494 + $5,000 $0 – $0 = $0