Allee Company had the following balances at the beginning of the year:

Allee estimates that its total overhead for the year will amount to $400,000. It allocates overhead based on direct labor hours. Allee estimates that its total 2010 direct labor hours for the year will be 100,000 hours. Because it produces monthly financial statements, Allee makes adjusting entries at the end of each month. However, over- or under-applied overhead is not closed to Cost of Services until the end of the year.
During January, Allee had the following transactions:
Jan. 1 Paid rent. Allee has a three-year, $162,000 lease. Rent is payable on the first of each month.
3 Paid for all supplies purchased last year.
4 Paid all utilities payable from last year.
7 Purchased supplies, $1,200.
10 Paid all salaries and wages payable from last year. $46,000 was for direct labor; $24,000 was for indirect labor.
12 Used supplies, $900.
19 Collected $30,000 from a customer for services performed and billed last December.
27 Used supplies, $2,600.
31 Paid all employees for January labor. Total direct labor costs for the month of January were $50,000, direct labor hours, 8,000. Indirect labor costs were $30,000.
31 Applied overhead for the month.
31 Estimated January utility expenses to be $2,000.
31 Completed and billed jobs costing $80,000. The company billed customers $140,000.
Required:
1. Prepare all journal entries necessary for the month of January.
2. What is the balance in the work-in-process services account at the end of January?
3. Compute the balance in the overhead account on January31.

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Debit Credit Accounts receivable Supplies. Work-in-process services Accounts payable (related to supplies) Salaries & wages payable Utilities payable. Rent payable. $44,000 30,000 S 7,000 70,000 2,400 3,000