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Bergo Bay's accounting system generated the following account balances on December 3 1 . The company s manager knows something is wrong with this list

Bergo Bay's accounting system generated the following account balances on December 31. The companys manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded.
Debit Credit
Cash $ 77,000
Accounts receivable 46,000
Raw materials inventory 28,000
Work in process inventory 0
Finished goods inventory 12,000
Prepaid rent 4,000
Accounts payable $ 8,600
Notes payable 11,600
Common stock 40,000
Retained earnings (prior year)79,000
Sales 203,800
Cost of goods sold 113,000
Factory overhead 25,000
General and administrative expenses 38,000
Totals $ 343,000 $ 343,000
These six documents must be processed to bring the accounting records up to date.
Materials requisition 10: $ 4,200 direct materials to Job 402
Materials requisition 11: $ 7,900 direct materials to Job 404
Materials requisition 12: $ 2,400 indirect materials
Labor time ticket 52: $ 7,000 direct labor to Job 402
Labor time ticket 53: $ 13,000 direct labor to Job 404
Labor time ticket 54: $ 5,000 indirect labor
Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost.
Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $129,400 at the end of the current year.
Assume that the $2,400 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets?Prepare an income statement.
BERGO BAY COMPANY
Income Statement
For Year Ended December 31
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