Directions
Using the following information and templates in each workbook, you will complete the following:
1. Prepare journal entries to record the preceding transactions.
2. Post the entries prepared in step 1 to their respective T-accounts.
3. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
4. Prepare and income statement for the year.
Information and Data
White Corporation is a manufacturer that uses job-order costing. On January 1, the company's inventory balances were as follows:
Raw Materials	$ 20,000
Work in Process	$ 15,000
Finished Goods	$ 30,000
The company applies overhead cost to jobs on the basis of machine-hours worked. For the current year, the company's predetermined overhead rates was based on a cost forumulat that estimated $450,000 of total manufacturing overhead for an estimated activity level of 75,000 machine-hours. The following transactions were recorded for the year:
A. Raw materials were purchased on account, $410,000.
B. Raw materials were used in production, $380,000 ($360,000 direct materials and $20,000 indirect materials).
C. The following costs were accrued for employee services: Direct Labor, $75,000; Indirect Labor, $110,000; Sales Commissions, $90,000; and Administrative Salaries, $200,000.
D. Sales travel costs (on account) were $17,000.
E. Utility costs (on account) in the factory were $43,000.
F. Advertising costs (on account) were $180,000.
G. Depreciation was recorded for the year, $350,000 ($280,000 relates to factory assets and $70,000 relates to selling and administrative assets).
H. Insurance expired during the year, $10,000 ($7,000 relates to factory operations and the remaining relates to sellling and administrative activities.
I. Manufacturing overhead was applied to production. Due to greater than expected demand for its products, the company worked 80,000 machine hours on all jobs during the year.
J. Jobs costing $900,000 to manufacture according to their job cost sheets were completed during the year.
K. Jobs were sold on account to customers during the year for a total of $1,500,000. The jobs cost $870,000 to manufacture according to their job cost sheets.
L. Close out entry to for Underapplied / Overapplied Manufacturing Overhead (as stated in item 3 above).