Alake Company is a manufacturing firm that uses job-order costing. At the beginning and ending of the year, the company's inventory balances were as follows:

Beginning ($) Ending ($)

Raw materials 100,000 50,000

Work in process 200,000 87,000

Finished goods 110,000 200,000

The company applies overhead to jobs using a predetermined overhead rate based on machine- hours. At the beginning of the year, the company estimated that it would work 40,000 machine- hours and incur $280,000 in manufacturing overhead cost. The following transactions were recorded for the year:

a. Raw materials were purchased, $500,000.

b. Raw materials were requisitioned for use in production, $550,000 ($490,000 direct and $60,000 indirect).

c. The following employee costs were incurred: direct labor, $210,000; indirect labor, $70,000; and administrative salaries, $120,000.

d. Selling costs, $160,000.

e. Factory utility costs, $50,000.

f. Depreciation for the year was $140,000 of which $120,000 is related to factory operations and $20,000 is related to selling and administrative activities.

g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 41,000 machine-hours.

h. Sales revenue for the year totaled $1,200,000.

i. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.

Required:

1. Compute

a. Costs of goods manufactured for the year

,b. Costs of goods sold for the year,

c. Net income for the year.

2. Prepare any necessary journal entries for the costs of goods manufactured and costs of goods sold.

3. Prepare the appropriate journal entry for each of the items above (a. through i.). You can assume that all transaction with employees, customers, and suppliers were conducted in cash.