For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data.

Prepare entries in a job order cost system and partial income statement.

Job Number	Explanation	Direct Materials	Direct Labor	Manufacturing Overhead	Total Costs
7640	Balance 1/1	$25,000	$24,000	$28,800	$77,800
	Current year's costs	30,000	36,000	43,200	109,200
7641	Balance 1/1	11,000	18,000	21,600	50,600
	Current year's costs	43,000	48,000	57,600	148,600
7642	Current year's costs	58,000	55,000	66,000	179,000

Other data:

1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.

2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.

3. Job No. 7640 and Job No. 7641 were completed during the year.

4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.

5. Manufacturing overhead incurred on account totaled $120,000.

6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000.

Instructions

a. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.

b. Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.

c. Determine the gross profit to be reported for 2020.