Alphine Products Inc uses a job-order cost system. The company's inventory balance on April1, the start of its fiscal year were as follows:

Raw materials inventory$32,000

Work in porcess: $20,000

Finished goods: $48,000

During the year, the following transactions were completed:

a. Raw materials were purchased on account $170,000

b. Raw materials were issued from the storeroom for use in production, $180,000 (80% direct and 20% indirect)

c.Employee salaries and wages were accrued as follows(direct labour $200,000indirect labour $82,000 and selling and admin salaries $90,000)

d. Utility costs were incurred in the factory $65,000

e. Advertising costs were incurred $100,000

f. Prepaid insurance expired during the year$200,000 (90% factory, 10% office )

g. Amortization were recorded $180,000 (85% factory, 15% office)

h.Manufacturing overhead was applied to jobs at the rate 175% of the direct labour cost

i. Goods that cost $700,000 to manufacture according to their job cost sheets were transferred to finished goods warehouse

j Sales for the year totalled $1,000,000 and were all on account.The total cost to manufacture these goods was $720,000

Required:

1. Prepare journal entries to each transaction

2.Prepare the T-Account for raw materials, Work-in-process, finished goods, Manufacturing overhead and COGS

3.Is the manufacturing overhead under-applied or over-applied for the year? Prepare a journal entry to close the balance to COGS.

4.Prepare an income statement for the year.