Bergamo Bay?s computer system generated the following trial balance on December 31, 2019. The company?s manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Wages Payable) has not been recorded.

After examining various files, the manager identifies the following six source documents that need to beprocessed to bring the accounting records up to date.

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 200% of direct labor cost.

Required

1. Use information on the six source documents to prepare journal entries to assign the following costs.

a. Direct materials costs to Work in Process Inventory.

b. Direct labor costs to Work in Process Inventory.

c. Overhead costs to Work in Process Inventory.

d. Indirect materials costs to the Factory Overhead account.

e. Indirect labor costs to the Factory Overhead account.

2. Determine the revised balance of the Factory Overhead account after making the entries in part 1. Determine whether there is any under- or overapplied overhead for the year. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material.

3. Prepare a revised trial balance.

4. Prepare an income statement for 2019 and a balance sheet as of December 31, 2019.

5. Assume that the $5,600 on materials requisition 21-3012 should have been direct materials charged to Job 404. Indicate whether this error results in overstated or understated total assets on the balance sheet at December 31, 2019.

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Debit Credit Cash $170,000 Accounts receivable 75,000 Raw materials inventory... 80,000 Work in process inventory Finished goods inventory 15,000 Prepaid rent ..... 3,000 $ 17,000 Accounts payable Notes payable... Common stock ..... 25,000 50,000 Retained earnings 271,000 373,000 Sales..... Cost of goods sold 218,000 Factory overhead... 115,000 Operating expenses Totals 60,000 $736,000 $736,000 Materials requisition 21-3010: $10,200 direct materials to Job 402 Materials requisition 21-3011: $18,600 direct materials to Job 404 Materials requisition 21-3012: $5,600 indirect materials Labor time ticket 6052: $36,000 direct labor to Job 402 Labor time ticket 6053: $23,800 direct labor to Job 404 Labor time ticket 6054: $8,200 indirect labor