Reimel Furniture Company, Inc. incurred the following costs during 20x2.

During 20x2, products costing $120,000 were finished, and products costing $132,000 were sold on account for $195,000. There were no purchases of raw material during the year. The beginning balances in the firm’s inventory accounts are as follows:

Required:
1. Prepare T-accounts to show the flow of costs through the company’s manufacturing accounts during 20x2.
2. Prepare a partial balance sheet and a partial income statement to reflect the information given above. (Hint: See Exhibit 3–2.)

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Direct material used Direct labor.......... Manufacturing overhead applied $174,000 324,000 180,000