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Munoz Manufacturing Company was started on January 1, 2018. The company was affected by the following events during its first year of operation:
Acquired $1,700 cash from the issue of common stock.
Paid $540 cash for direct raw materials.
Transferred $420 of direct raw materials to work in process.
Paid production employees $650 cash.
Paid $370 cash for manufacturing overhead costs.
Applied $220 of manufacturing overhead costs to work in process.
Completed work on products that cost $1,070.
Sold products that cost $820 for $1,630 cash.
Paid $400 cash for selling and administrative expenses.
Made a $70 cash distribution to the owners.
Closed the Manufacturing Overhead account.
Required
Record these events in a horizontal statements model. The first event is shown as an example.
Prepare a schedule of cost of goods manufactured and sold.
Record these events in a horizontal statements model. The first event is shown as an example. (Enter decreases to account balances with a minus sign.)
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| | | | Assets | = | Equity | | | | Event No. | Cash | + | Manufacturing Overhead | + | Raw Materials | + | Work in Process | + | Finished Goods | = | Common Stock | + | Retained Earnings | | Revenue | | Expense | = | Net Income | | 1. | $1,700 | + | | + | | + | | + | | = | $1,700 | + | | | | | | = | | | 2. | (540) | + | | + | 540 | + | | + | | = | | + | | | | | | = | | | 3. | | + | | + | (420) | + | 420 | + | | = | | + | | | | | | = | | | 4. | (650) | + | | + | | + | 650 | + | | = | | + | | | | | | = | | | 5. | (370) | + | 370 | + | | + | | + | | = | | + | | | | | | = | | | 6. | | + | (220) | + | | + | | + | | = | | + | | | | | | = | | | 7. | | + | | + | | + | (1,070) | + | 1,070 | = | | + | | | | | | = | | | 8a. | 1,630 | + | | + | | + | | + | | = | | + | 1,630 | | 1,630 | | | = | 1,630 | | 8b. | | + | | + | | + | | + | (820) | = | | + | (820) | | | | 820 | = | (820) | | 9. | (400) | + | | + | | + | | + | | = | | + | (400) | | | | 400 | = | (400) | | 10. | (70) | + | | + | | + | | + | | = | | + | (70) | | | | | = | | | 11. | | + | (150) | + | | + | | + | | = | | + | (150) | | | | 150 | = | (150) | | Total | $1,300 | + | $0 | + | $120 | + | $0 | + | $250 | = | $1,700 | + | $190 | | $1,630 | | $1,370 | = | $260 | |
Prepare a schedule of cost of goods manufactured and sold.
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| | | MUNOZ MANUFACTURING COMPANY | | Schedule of Cost of Goods Manufactured and Sold | | For the Year Ended December 31, 2018 | | | | | | | | Raw materials available | 0 | | | | | Raw materials used | 0 | | | | | | | | Total manufacturing costs | 0 | | | | | Total work in process inventory | 0 | | | | | Cost of goods manufactured | 0 | | | | | Cost of goods available for sale | 0 | | | | | Cost of goods sold | $0 | |
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