BagsSoStrong Company had the following account balances as of August 1, 2001:

Raw Materials (direct and indirect) Inventory $ 9,300 Work in Process Inventory 14,000 Finished Goods Inventory 18,000 During August, the company incurred the following factory costs:

• Purchased $82,000 of raw materials on account.

• Issued $90,000 of raw materials, of which $67,000 were direct to the product.

• Factory payroll of $44,000 was accrued; $31,000 was for direct labor and the rest was for supervisors.

• Utility costs were accrued at $3,500; of these costs, $800 were fixed.

• Property taxes on the factory were accrued in the amount of $1,000.

• Prepaid insurance of $800 on factory equipment expired in August.

• Straight-line depreciation on factory equipment was $20,000.

• Predetermined overhead of $62,500 ($28,000 variable and $34,500 fixed) was applied to Work in Process Inventory.

• Goods costing $170,000 were transferred to Finished Goods Inventory.

• Sales on account totaled $350,000.

• Cost of goods sold was $175,000.

• Selling and administrative costs were $140,000 (credit “Various Accounts”).

• Ending Work in Process Inventory is $3,300.

Required:

a. Journalize the transactions for August.

b. Prepare a schedule of cost of goods manufactured for August using normal costing.

c. Prepare an income statement, including a detailed schedule of cost of goods sold.