Theater Staging, Inc., assembles light and sound equipment for installation in various entertainment / Fiouvor Goce iooos:

facilities. An inventory of material and equipment is on hand at all times so that installation could start a Journal Entries quickly as possible. Special equipment has been ordered as required. On September 1, the Materials an (LO 2,3, 4,5)

Equipment Inventory account had a $48,000 balance. The Work-in-Process Inventory account is maintained to record the costs of installation work not yet complete. There were two such jobs on September 1, with the following costs: “2 Memphis We eS Country Music Hall Starlight Theater 6 Job 106 Job 111 Material and equipment...........cccceeee $32,000 $95,000 Wecinicianlalonweennm cr crnn ee 6,500 9,700 Overhead (applied) .....csccceces neces 4,800 14,250 Overhead has been applied at 15 percent of the costs of material and equipment installed. During September, two new installations were begun. Additional work was done on jobs 106 and 111, with the latter completed and billed to Starlight Theater. Details on the costs incurred on jobs during September follow:

Job 106 Il 115 116 Matetial Qh GQuioimem t.s acs wcrc te.csnsarnseesscnearccuse $3,200 $14,200 $17,000 $6,200 Hechniclan labor (OmaccOunt wes wastes: 1,800 1,200 3,100 900 Other Period Events

© Received $25,000 payment on job 111, which was delivered to the customer.

© Purchased material and equipment for $18,700.

® Billed Starlight Theater $180,000 and received payment for half of that amount.

© Determined that payroll for support personnel totaled $1,300.

@ Issued supplies and incidental installation material for current jobs costing $310.

™ Recorded overhead and advertising costs for the installation operation as follows (all cash except equipment depreciation):

Advertising and promotion campaign...... SU IUSIOh — LENCVOLEYINT WEDREIRY. so saucca derso scenoeneccenenconmcbvox $1,100 ElCCInICaliImSOSCIONS pee cette ene 400 Showroom and storage area rental......... 1,350 Telephone and other miscellaneous....... SSO MUST CAINCIICINIVEIAY COSI cacnassannceocbenpecunas 640 Equipment depreciation................ eli 900 Required

a. Prepare journal entries to record the flow of costs for the installation operation during September.

b. Calculate the amount of over- or underapplied overhead for the month. This amount is closed to Cost of Goods Sold.

c. Determine inventory balances for Material and Equipment Inventory and Work-in-Process Inventory.