Vernon Manufacturing started in 2018 with the following acco

Vernon Manufacturing started in 2018 with the following account balances: Cash Common stock Retained earnings Raw materials inventory Work in process inventory Finished goods inventory (380 unitse $5.95 each) $6,000 5,151 5,400 1,400 890 2,261 Transactions during 2018 1. Purchased $2,890 of raw materials with cash. 2. Transferred $3,770 of raw materials to the production department. 3. Incurred and paid cash for 240 hours of direct labor@ $15.30 per hour 4. Applied overhead costs to the Work in Process Inventory account. The predetermined overhead rate is $16.00 per direct labor hour. 5. Incurred actual overhead costs of $4,000 cash. 6. Completed work on 1,250 units for $6.00 per unit. 7. Paid $1,160 in selling and administrative expenses in cash. 8. Sold 1,250 units for $10,600 cash revenue (assume FIFO cost flow). 9 Vernon charges overapplied or underapplied overhead directly to Cost of Goods Sold

Solution

Requirement 1)

Req 2)

Cost of goods manufactured and sold :

Req 3)

Income Statement :

Req 4)

Balance Sheet :

event	cash	M o/h	RM	WIP	FG	=	CS	RE		Revenue	- Expenses	= Net Income
BB	6000		1400	890	2261	=	5151	5400
1	-2890		2890
2			-3770	3770
3	-3672			3672
4		-3840		3840
5	-4000	4000
6				-7500	7500
7	-1160					=					1160	-1160
8a	10600					=				10600		+10600
8b					-7481	=					7481	-7481
9		-160				=					160	-160
Total	4878	0	520	4672	2280	=	5151	5400		10600	8801	1799
G Total					12350	=	12350