Service Cost Flows Allee Company had the following balances at the beginning of 2009:

Allee estimates that its total 2009 overhead will amount to $400,000. It allocates overhead based on direct labor hours. Allee estimates that its total 2009 direct labor hours will be 100,000 hours. Because it produces monthly financial statements, Allee makes adjusting entries at the end of each month. However, over- or underapplied overhead is not closed to Cost of Services until the end of the year.
During January 2009, 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 in 2008.
4 Paid all utilities payable from 2008.
7 Purchased supplies, $1,200.
10 Paid all salaries & wages payable from 2008. $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 in December 2008.
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 its 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 January 31.

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Debit Credit Accounts receivable $44,000 Supplies ..... 10,000 Work-in-process services 30,000 Accounts payable (related to supplies) $ 7,000 Salaries & wages payable Utilities payable Rent payable 70,000 2,400 3,000