Costs incurred:

Purchases of direct materials (net) on credit Direct manufacturing labor cost

Indirect labor

Depreciation, factory equipment Depreciation, office equipment Maintenance, factory equipment Miscellaneous factory overhead

Rent, factory building

Advertising expense

Sales commissions

$181,000 97,000 51,400 63,000 9,700 56,000 10,100 97,000 87,000 33,000

Inventories:

Direct materials Work in process Finished goods

January 1, 2017

S 10,400

8,500 62,000

December 31, 2017 $19,000

27,000 35,000

Visual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $3.30 per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials.

Required:

1. Prepare journal entries to record the transactions for 2017 including an entry to close out over- or under allocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry.

2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the

Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account