4-30 Job costing, journal entries, T-accounts, source documents. Production Company produces gadgets for the coveted small appliance market. The following data reflect activity for the most recent year, 2019:

Costs incurred

Purchases of direct materials (net) on account

$124,000

Direct manufacturing labour cost

80,000

Indirect labour

54,500

Depreciation, factory equipment

30,000

Depreciation, 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

Beginning and ending inventories for the year were as follows:

January 1, 2019

December 31, 2019

Direct materials

$ 9,000

$11,000

Work-in-process

6,000

21,000

Finished goods

69,000

24,000

Production Company uses a normal job-costing system and allocates overhead to work-in-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

Prepare journal entries to record the 2019 transactions including an entry to close out over- 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.

Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, Manufacturing Overhead Control, and Manufacturing Overhead Allocated accounts.