Bergo Bay's accounting system generated the following account balances on December $31.$ The company$$s 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 $ $170,000$

Accounts receivable $75,000$

Raw materials inventory $80,000$

Work in process inventory $0$

Finished goods inventory $15,000$

Prepaid rent $3,000$

Accounts payable $ $17,000$

Notes payable $25,000$

Common stock $50,000$

Retained earnings $($prior year$)271,000$

Sales $373,000$

Cost of goods sold $218,000$

Factory overhead $115,000$

General and administrative expenses $60,000$

Totals $ $736,000$ $ $736,000$

These six documents must be processed to bring the accounting records up to date.

Materials requisition $10$: $ $10,200$ direct materials to Job $402$

Materials requisition $11$: $ $18,600$ direct materials to Job $404$

Materials requisition $12$: $ $5,600$ indirect materials

Labor time ticket $52$: $ $36,000$ direct labor to Job $402$

Labor time ticket $53$: $ $23,800$ direct labor to Job $404$

Labor time ticket $54$: $ $8,200$ indirect labor

Jobs $402$ and $404$ are the only jobs in process at year$-$end. The predetermined overhead rate is $200\%$ of direct labor cost.

Prepare an income statement for the year and a balance sheet as of December $31.$ Hint: Retained earnings is $$356,800$ at the end of the current year.

Assume that the $$5,600$ on materials requisition $12$ should have been direct materials charged to Job $404.$ Does this error result in overstatement or understatement of total assets?