Fantastic Props, Inc , designs and fabricates movie props such as mock ups of star fighters and cybernetic robots The companys balance sheet as of January 1, the beginning of the current year, appears below Fantastic Props, Inc Balance Sheet January 1 Assets Current assets Cash $13,000 Accounts receivable 45,000 Inventories Raw materials $36,000 Work in process 31,000 Finished goods (props awaiting shipment) 51,000 118,000 Prepaid insurance 5,300 Total current assets 181,300 Buildings and equipment 550,000 Less accumulated depreciation 240,000 310,000 Total assets $491,300 Liabilities and Stockholders' Equity Accounts payable $74,000 Common stock $210,000 Retained earnings 207,300 417,300 Total liabilities and stockholders' equity $491,300 Because each prop is a unique design and may require anything from a few hours to a month or more to complete, Fantastic Props uses a job order costing system Overhead in the fabrication shop is charged to props on the basis of direct labor cost The companys predetermined overhead rate for the year is based on a cost formula that estimated $153,000 in manufacturing overhead for an estimated allocation base of $170,000 direct labor dollars The following transactions were recorded during the year a Raw materials, such as wood, paints, and metal sheeting, were purchased on account, $86,000 b Raw materials were issued to production, $93,000 $5,200 of this amount was for indirect materials c Payroll costs incurred and paid direct labor, $121,000 indirect labor, $47,200 and selling and administrative salaries, $68,000 d Fabrication shop utilities costs incurred, $13,000 e Depreciation recorded for the year, $23,000 ($4,100 on selling and administrative assets $18,900 on fabrication shop assets) f Prepaid insurance expired, $4,100 ($3,500 related to fabrication shop operations, and $600 related to selling and administrative activities) g Shipping expenses incurred, $43,000 h Other manufacturing overhead costs incurred, $17,800 (credit Accounts Payable) i Manufacturing overhead was applied to production Overhead is applied on the basis of direct labor cost j Movie props that cost $284,000 to produce according to their job cost sheets were completed k Sales for the year totaled $470,000 and were all on account The total cost to produce these movie props was $250,000 according to their job cost sheets l Collections on account from customers, $430,000 m Payments on account to suppliers, $143,000 Required 1 2 Prepare a T account for each account on the companys balance sheet, and enter the beginning balances Make an entry directly into the T accounts for transactions (a) through (m) Determine an ending balance for each T account (Record the transactions in the given order Round your intermediate calculations to 2 decimal places ) 3 a Was manufacturing overhead underapplied or overapplied for the year (Input the amount as a positive value Round your intermediate calculations to 2 decimal places ) 3 b Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold (Round Predetermined overhead rate percentage to 2 decimal places Round allocation percentage to the nearest whole percent Round final answer to the nearest dollar ) 4 Prepare an income statement for the year (Round Predetermined overhead rate to 2 decimal places Round allocation percentage to the nearest whole percent Round other intermediate calculations to the nearest dollar amount Input all amounts as positive values )

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Fantastic Props, Inc., designs and fabricates movie props such as mock-ups of star-fighters and cybernetic robots. The companys balance sheet as of January 1, the

Fantastic Props, Inc., designs and fabricates movie props such as mock-ups of star-fighters and cybernetic robots. The companys balance sheet as of January 1, the beginning of the current year, appears below:

Fantastic Props, Inc. Balance Sheet January 1
Assets
Current assets:
Cash		$13,000
Accounts receivable		45,000
Inventories:
Raw materials	$36,000
Work in process	31,000
Finished goods (props awaiting shipment)	51,000	118,000

Prepaid insurance		5,300

Total current assets		181,300
Buildings and equipment	550,000
Less accumulated depreciation	240,000	310,000

Total assets		$491,300

Liabilities and Stockholders' Equity
Accounts payable		$74,000
Common stock	$210,000
Retained earnings	207,300	417,300

Total liabilities and stockholders' equity		$491,300

Because each prop is a unique design and may require anything from a few hours to a month or more to complete, Fantastic Props uses a job-order costing system. Overhead in the fabrication shop is charged to props on the basis of direct labor cost. The companys predetermined overhead rate for the year is based on a cost formula that estimated $153,000 in manufacturing overhead for an estimated allocation base of $170,000 direct labor dollars. The following transactions were recorded during the year:

a.	Raw materials, such as wood, paints, and metal sheeting, were purchased on account, $86,000.
b.	Raw materials were issued to production, $93,000; $5,200 of this amount was for indirect materials.
c.	Payroll costs incurred and paid: direct labor, $121,000; indirect labor, $47,200; and selling and administrative salaries, $68,000.
d.	Fabrication shop utilities costs incurred, $13,000.
e.	Depreciation recorded for the year, $23,000 ($4,100 on selling and administrative assets; $18,900 on fabrication shop assets).
f.	Prepaid insurance expired, $4,100 ($3,500 related to fabrication shop operations, and $600 related to selling and administrative activities).
g.	Shipping expenses incurred, $43,000.
h.	Other manufacturing overhead costs incurred, $17,800 (credit Accounts Payable).
i.	Manufacturing overhead was applied to production. Overhead is applied on the basis of direct labor cost.
j.	Movie props that cost $284,000 to produce according to their job cost sheets were completed.
k.	Sales for the year totaled $470,000 and were all on account. The total cost to produce these movie props was $250,000 according to their job cost sheets.
l.	Collections on account from customers, $430,000.
m.	Payments on account to suppliers, $143,000.

Required:

1&2.

Prepare a T-account for each account on the companys balance sheet, and enter the beginning balances. Make an entry directly into the T-accounts for transactions (a) through (m). Determine an ending balance for each T-account. (Record the transactions in the given order. Round your intermediate calculations to 2 decimal places.)

3-a.Was manufacturing overhead underapplied or overapplied for the year? (Input the amount as a positive value. Round your intermediate calculations to 2 decimal places.)

3-b.Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (Round "Predetermined overhead rate percentage" to 2 decimal places. Round allocation percentage to the nearest whole percent. Round final answer to the nearest dollar.)

4.Prepare an income statement for the year. (Round "Predetermined overhead rate" to 2 decimal places. Round allocation percentage to the nearest whole percent. Round other intermediate calculations to the nearest dollar amount. Input all amounts as positive values.)