Almeda Products, Inc. uses a job-order costing system. The companys inventory balances on April 1, the start of its fiscal year, were as follows:

Raw materials	$	33,000
Work in process		20,100
Finished goods		48,100

During the year, the following transactions were completed:

Raw materials were purchased on account, $173,000.

Raw materials were issued from the storeroom for use in production, $183,000 (80% direct and 20% indirect).

Employee salaries and wages were accrued as follows: direct labour, $204,000; indirect labour, $82,200; selling and administrative salaries, $90,200.

Utility costs were incurred in the factory, $65,100.

Advertising costs were incurred, $100,100.

Prepaid insurance expired during the year, $20,200 (70% related to factory operations, and 30% related to selling and administrative activities).

Depreciation was recorded, $182,000 (85% related to factory assets, and 15% related to selling and administrative assets).

Manufacturing overhead was applied to jobs at the rate of 150% of direct labour cost.

Goods that cost $661,500 to manufacture according to their job cost sheets were transferred to the finished goods warehouse.

Sales for the year totalled $1,010,000 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $685,000.

Required:

1. Prepare journal entries to record the transactions for the year. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

2. Prepare T-accounts for raw materials, work in process, finished goods, manufacturing overhead, and cost of goods sold. Post the appropriate parts of your journal entries to these T-accounts. Compute the ending balance in each account. (Do not forget to enter the beginning balances in the inventory accounts.)

3-a. Is manufacturing overhead underapplied or overapplied for the year?

3-b. Prepare a journal entry to close this balance to cost of goods sold. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

4. Prepare an income statement for the year.