AbelingIndustries usesajob-order costing system andapredetermined overhead rate basedondirect labor cost.Estimatedmanufacturingoverheadforthe coming yearwas

$600,000andestimated directlaborhourswere40,000.OnJanuary1,thecompanyhad

thefollowinginventories

Rawmaterialsinventory $0

Work in process (Job No. 125) $12,000Finished goods inventory $0

Thefollowinginformationpertainstothecompany's activitiesforthemonthofJanuary:

1. Purchased$180,000ofmaterialsonaccount.
2. Jobs126and127werestartedduringthemonth.
3. Materialsrequisitionedforproduction totaled $90,000,ofwhich$5,000wasfor indirect materials.The remainder was distributed as follows:

JobNo.125	$32,000
JobNo.126	27,000
JobNo.127	26,000

1. Factory payroll for the month totaled $140,000, of which $23,000 was forindirect labor.Thecompanyuses alaborrate of$13perdirect labor hour.Thedirectlabor was distributed as follows:

JobNo.125 $65,000

JobNo.126 39,000

Job. No.127 13,000

1. Thecompanymadeadjusting entriesattheendof Januaryto recordthefollowing expenses:

Depreciation$45,000Expiredinsurance7,000

1. Othermanufacturingcotsnotyetpaidtotaled$50,000.
2. Manufacturingoverheadwasapplied usingthe predetermined overheadrate based upon direct labor hours.
3. JobNos.125and126werecompletedduringthemonth.
4. JobNo.125wassold duringthemonth atasellingprice of170percentof manufacturing cost.

Do:

1. Preparejournalentries torecord themanufacturingactivitiesofthecompany for January.
2. Preparethejournalentries to dispose ofunderapplied oroverapplied overheadif the underapplied or overapplied overhead is treated as an adjustment tocostof goods sold.