Question

Ladora Construction Company began operations on January 1, 2019, when it acquired $30,000 cash from the issuance of common stock. During the year, Ladora purchased $6,000 of direct raw materials and used $5,640 of the direct materials. There were 108 hours of direct labor worked at an average rate of $20 per hour paid in cash. The predetermined overhead rate was $9 per direct labor hour. The company started construction on three prefabricated buildings. The job cost sheets reflected the following allocations of costs to each building:

	Direct Materials			Direct Labor Hours
Job 1	$	1,440		30
Job 2		2,400		50
Job 3		1,800		28

The company paid $320 cash for indirect labor costs. Actual overhead cost paid in cash other than indirect labor was $640. Ladora completed Jobs 1 and 2 and sold Job 1 for $5,000 cash. The company incurred $600 of selling and administrative expenses that were paid in cash. Over- or underapplied overhead is closed to Cost of Goods Sold.

Required

1. Record the preceding events in a horizontal statements model. The first event for 2019 has been recorded as an example.

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

3. Record the closing entry for over- or under applied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.

I did the problem but got these #'s wrong. If someone could please help. Thanks in advance.

Equity Assets Finished Goods Common Stock Expenses Work In + Process Revenue Manufacturing+ Raw Materials Earnings 0 0 0 0 30,000 + 0 6,000 (5,640) 5,640 2,160 972) (6,160) 6,160 (600) 1,150 (600) 3,850 5,000 1.150 (3,850) 3 12 e 12) 12 562 5,000 1738 3,262 360 + 2,612 + 2,310 - 30,000 + 25,280+ 0

Answer 1

HORIZONTAL MODEL ASSETS quity Cash Material + work in Process + Finished goods t Manufacturing Overhead =Common stock·t Retained Earnings Revenue-Expen Event Common Stock acquire Purchase of Raw material Use of Raw material Direct labor used Indirect labor cost paid Overhead cost paid -Ra ses Net Income NA NA NA NA NA NA NA NA 30,000NA +NA + NA 5,640 NA 2,160NA + NA +NA 972 NA + NA +NA + NA + NA 30,000NA +NA + NA + NA +NA + NA +NA NA NA NA NA NA NA NA + NA NA (6,000)+ NA 6,000 NA 5,640)+ NA NA 320NA 640 NA 972)NA NA (2,160 NA 320) NA (640)NA + NA NA NA NA NA Manufacturing Overhead cost applied NA Cost of Completed jobs transferred to Finished goods Selling and administrative expenses incurred Sales revenue from the sale of Job 1 Overapplied cost transferred to Cost of NA 6,160) 6,160NA + NA (600NA 5,000+ =| NA NA (600) NA 2,6905,000 (600) 2,690 4 NA +NA 600 2,310) NA s sold 12 12 12 Ending Balance 25,280+ 360 + 2,612+ 3,850+ 30,000+ 2,1025,000 2,898 2,102

Work in Process- Job 1 Work in Process- Job 2 Transfer to Finished Transfer to Finished 2,400 1,000 3,850 goods Raw Material Used Direct labor used Manufacturing Overhead applied 1,440 600 2,310 goods Raw Material Used Direct labor used Manufacturing Overhead applied 270 450 Work in Process- Job 3 Manufacturing Overhead Manufacturing 972 Overhead applied Raw Material Used Direct labor used Manufacturing Overhead applied Ending Balance 1,800 560 320 640 Indirect labor cost incurred Overhead incurred Overapplied overhead to cost of goods sold 252 2,612 12 Cost of goods sold Work In Process Account Overapplied overhead 12 to cost of goods sold Transferred to finished Cost of Job 1 sold Balance 2,310 2,298 Raw Material Used labor used Manufacturing Overhead applied Ending Balance 5,640 2,160 6,160 goods 972 2,612 Working Notes Job 1 Job 2 Job 3 Direct labor hours (a) Direct labor used (a 20 Manufacturing Overhead applied (a9) 30 50 28 600 1,000 560 270 450 252

Ladora Construction Company Cost of goods manufactured and Sold Beginning Raw material Inventory Purchases Ending Raw material Inventory Raw material Used Labor used Overhead 6,000 360 5,640 2,160 972 8,772 Total Manufacturing Cost Beginning Work in Process Total Work in Process Ending Work in Process Cost of goods Manufactured Beginning finished goods Goods Available Ending Finished goods Cost of goods sold 8,772 (2,612) 6,160 6,160 (3,850) 2,310

Ladora Construction Compan Income Statement For the year Ended 2019 Sales revenue Cost of goods sold Gross Margin Selling and administrative expenses Net Income 5,000 2,298 2,702 (600) 2,102 Ladora Construction Compan Balance Sheet As on Year Ended 2019 Assets Cash Raw material Inventory WIP Invento Finished goods Inventory Total Assets 25,280 360 2,612 3,850 32,102 Equi Common Stock Retained Earnings Total Equity 30,000 2,102 32,102