Hudson Company's trial balance as of January 1. the beginning of its fiscal year, is given below:

Hudson Company is a manufacturer that uses a job-order costing system. During the year, the following transactions took place:

a. Raw materials purchased on account, $40,000.

b. Raw materials were requisitioned for use in production, S38,000 (85% direct and 15% indirect).

c. Factory utility costs incurred, $19,1 00.

d. Depreciation was recorded on plant and equipment, $36,000. Three-fourths of the depreciation related to factory equipment, and the remainder related to selling and administrative equipment.

e. Advertising expense incurred. $48,000.

f. Costs for salaries and wages were incurred as follows:

Required:
1. Prepare a T-account for each account in the company's trial balance and enter the opening balances shown above.
2. Record the transactions above directly into the T-accounts. Prepare new T-accounts as needed. Key your entries to the letters

(a) through (m) above. Find the ending balance in each account.
3. Is manufacturing overhead underapplied or overapplied for the year? Make an entry in the T-accounts to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4. Prepare an income statement for the year. (Do not prepare a schedule of cost of goods manufactured;
all of the information needed for the income statement is available in the T-accounts.)

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Cash Accounts Receivable Raw Materials Work in Process Finished Goods. Prepaid Insurance Plant and Equipment Accumulated Depreciation. Accounts Payable.. Capital Stock Retained Earnings Total.... $ 7,000 18,000 9,000 20,000 32,000 4,000 210,000 $ 53,000 38,000 160,000 49,000 $300,000 $300,000