ABC Company had the following beginning balances as of 1/1/20X1:

Raw Materials $7,000

Work in Process 30,000

Finished Goods 10,000

Refer to the partial chart of accounts or ledger for account names.

a.Raw materials were purchased on account, $60,000.

b.Raw materials were requisitioned for use in production, $52,000.($50,000 direct and $2,000 indirect).

c.Accrual of factory wages $60,000; and maintenance workers for the factory $15,000.

d.The following costs were incurred on the factory; Utilities $21,000, Equipment Rental $16,000

and cable, internet, phone for the factory $3,000.

e.The accrual of property taxes on the factory was made in the amount of $13,000.

f.The expiration of prepaid medical insurance on factory workers was made in the amount of $18,000.

g.Depreciation was recorded on the factory equipment in the amount of $18,000.

Application of Manufacturing Overhead is illustrated on Pages 93 & 94

h.XYZ Company applies overhead costs based on machine hours worked.For 20X1 the company

estimated that it will work 15,000 machine hours and incur $90,000 in manufacturing overhead costs.

The journal entry is made to apply Manufacturing Overhead.A total of 15,000 machine hours have occurred.

i.The accrual of management salaries $21,000 and office staff salaries $9,000 was made.

j.Depreciation on office equipment was made in the amount of $7,000.

k.Advertising for the period was accrued in the amount of $42,000.

l.Cable, internet, and phone expenses for Sales Offices was $38,000 and General & Administrative was $4,000.

m.$158,000 of goods were completed and transferred to the finished goods department.

n1.Sold $500,000 (Sales Price) on account.

n2.The goods had a cost of $118,500.'

1.Prepare journal entries to record the transactions above.

2.Post the entries to ledger "T" accounts.

3.Prepare (in good form) a Schedule of Cost of Goods Manufactured

and an Income Statement, detailing Cost of Goods Sold, for the year ending 12/31/20X1.

4a.Is Manufacturing Overhead underapplied or overapplied for the year?By what amount?

4b.Prepare the necessary entry to close manufacturing overhead.(Use the write-off approach).

4a.Answer:

Is MFG OH Underapplied or Overapplied? By what amount?

4b.Provide Entry to Close to COGS: