Job costing, journal entries, T-accounts, source documents. Production Company 2. Overallocation, $16,000 produces gadgets for the coveted small appliance market. The following data reflect activity for the most recent year, 2009:

Beginning and ending inventories for the year were as follows:

Production Company uses a normal job costing system and allocates overhead to workin-
process at a rate of $2.50 per direct manufacturing labour dollar. Indirect materials are insignificant, so there is no inventory account for indirect materials.
REQUIRED 1. Prepare journal entries to record the 2009 transactions including an entry to close out overallocated or underallocated overhead to cost of goods sold. For each journal entry, indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry.
2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated accounts.LO1

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Costs incurred Purchases of direct materials (net) on account $124,000 Direct manufacturing labour cost 80,000 Indirect labour 54,500 Amortization, factory equipment 30,000 Amortization, office equipment 7,000 Maintenance, factory equipment 20,000 Miscellaneous factory overhead 9,500 Rent, factory building 70,000 Advertising expense 90,000 Sales commissions 30,000