Problem 12-13A Job Order Costing System_Baucom Manufacturing Corporation

Problem 12-13A Job Order Costing System

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 fash unless otherwise indicated.)

            Direct Raw     Direct

         Materials Used     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 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 & 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.                              Net

         Assets                     Equity       Rev    -    Exp  =  Inc

Cash+Raw Mats+MOH+WIP+F.Gds=C.Stk+R.Ear[                           

$50,000  NA     NA   NA   NA =$50,000  NA     NA   -     NA  =  NA

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

C. Record the closing entry for over- or under applied 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.

Check Figures Given: d. COGM: $14,100. NI: $3,900.