For the year ended December 31, 2012, the job cost sheets of Heimer Company contained the following data.

Other data:
  1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.
  2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.
  3. Job No. 7640 and Job No. 7641 were completed during the year.
  4. Jobs 7638, 7639, and 7641 were sold on account for $530,000.
  5. Manufacturing overhead incurred on account totaled $120,000.
  6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $20,000, and depreciation on factory machinery $8,000.

Instructions
  (a) Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T account for Work in Process Inventory.) Calculate each of the following, then post each to the T account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.

  (b) Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to cost of goods sold.
  (c) Determine the gross profi t to be reported for 2012.