The following trial balance was taken from the records of Adams Manufacturing Company at the beginning of 2019: Cash 9430
Raw materials inventory 840
Work in process inventory 1210
Finished goods inventory 2100
Property, plant, and equipment 8000
Accumulated depreciation 3500
Transactions for the Accounting Period 8300
Retained earnings 9780
Total 21580 21580
1. Adams purchased $6,000 of direct raw materials and $360 of indirect raw materials on account. The indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $5,700 of direct raw materials had been used for production during the period. The use of indirect materials is determined at the end of the year by physically counting the supplies on hand.
2. By the end of the year, $5,300 of the accounts payable had been paid in cash.
3. During the year, direct labor amounted to 990 hours recorded in the Wages Payable account at $10.40 per hour.
4. By the end of the year, $9,396 of wages payable had been paid in cash.
5. At the beginning of the year, the company expected overhead cost for the period to be $6,552 and 1,040 direct labor hours to be worked. Overhead is allocated based on direct labor hours, which, as indicated in Event 3, amounted to 990 for the year.
6. Selling and administrative expenses for the year amounted to $1,000 paid in cash.
7. Utilities and rent for production facilities amounted to $4,730 paid in cash.
8. Depreciation on the plant and equipment used in production amounted to $1,580.
9. There was $11,700 of goods completed during the year.
10. There was $12,450 of finished goods inventory sold for $18,500 cash.
11. A count of the production supplies revealed a balance of $92 on hand at the end of the year.
12. Any over- or underapplied overhead is considered to be insignificant.
Required
i. Prepare T-accounts with the beginning balances shown in the preceding list and record all transactions for the year including closing entries in the T-accounts.
ii. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet.