$6).$ Problem $5-32$ Comprehensive Problem $[$LO$3,$ LO$4,$ LO$5,$ LO$7]70$ marks

Mountain Manufacturing Company produces custom stamped metal parts for a variety of customers in Western Canada. During January, the company had two jobs in process. Job A was an order for $1,200$ stamped parts and was started in December. Job A had $$12,000$ of manufacturing costs already accumulated on January $1.$ Job B was an order for $1,000$ stamped parts and was started in January.

The company used a job$-$order costing system. Total manufacturing overhead for the year was estimated to be $$576,000.$ Mountain Manufacturing uses direct labour$-$hours as the allocation base to establish its predetermined overhead rate. A total of $19,200$ direct labour$-$hours are expected to be worked during the year. On January $1,$ the start of the company$$s fiscal year, inventory account balances were as follows:

Raw Materials $ $15,000$

Work in Process $ $12,000$

Finished Goods $ $10,000$

During the month of January, the following transactions were completed:

Raw materials were purchased for $$30,000.$

Raw materials were requisitioned for use in production in the amount of $$35,000.$ Of this amount, $$25,000$ was related to manufacturing $($$$5,000$ for Job A and $$20,000$ for Job B$)$ and the rest were indirect materials.

In January, $$32,000$ of direct labour $($$$7,000$ for Job A and $$25,000$ for Job B$).$ In addition, $$2,000$ of indirect labour costs were incurred.

In January, the company incurred the following general factory costs: Utilities expense of $$8,000,$ rent on factory equipment of $$8,000,$ and insurance costs of $$1,900.$

The company recognized $$10,000$ in depreciation on factory equipment.

The company applied manufacturing overhead to Job A and Job B$.$ A total of $350$ direct labour$-$hours were spent completing Job A and $1,250$ direct labour$-$hours were recorded for Job B$.$

Administrative salaries of $$30,000$ were paid in January.

Selling expenses totalled $$6,000$ in January.

Job A was completed in January. The completed cost of Job A according to the job cost sheet was $$34,500.$ Job B remains in process at the end of January.

Sales of all $1,200$ units in Job A were recorded on account in the amount of $$48,300$ in January.

Required:

$1.$ Prepare journal entries to record the transactions for January. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)20$ marks

$2.$ Prepare T$-$accounts. Determine ending balances in the inventory accounts and in the Manufacturing Overhead account. $20$ marks

$3.$ Prepare a schedule of cost of goods manufactured. $10$ marks

$4$a$.$ Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. $($If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)5$ marks

$4$b$.$ Determine the adjusted Cost of Goods Sold. $5$ marks

$5.$ Prepare an income statement for the month of January. $10$marks