Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $85,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

Raw materials	$	10,700
Work in process	$	5,000
Finished goods	$	8,300

During the year, the following transactions were completed:

Raw materials purchased for cash, $ 167,000.

Raw materials used in production, $143,000 (materials costing $123,000 were charged directly to jobs; the remaining materials were indirect).

Cash paid to employees as follows:

Direct labor	$	158,000
Indirect labor	$	225,800
Sales commissions	$	24,000
Administrative salaries	$	48,000

Cash paid for rent during the year was $18,200 ($13,700 of this amount related to factory operations, and the remainder related to selling and administrative activities).

Cash paid for utility costs in the factory, $10,000.

Cash paid for advertising, $14,000.

Depreciation recorded on equipment, $22,000. ($16,000 of this amount related to equipment used in factory operations; the remaining $6,000 related to equipment used in selling and administrative activities.)

Manufacturing overhead cost was applied to jobs, $?.

Goods that had cost $229,000 to manufacture according to their job cost sheets were completed.

Sales for the year (all paid in cash) totaled $505,000. The total cost to manufacture these goods according to their job cost sheets was $218,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (dont forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.

of Guandong. Chine, is a femily-owned enterprise that makes birdcages for the South China market The company through an extensive network of street vendors who receive commissions on their sales. The company uses a job-arder costing system In which overhead is appliled to jobs on the basis of direct labor cost its predetermined overheed rate is besed on a cost formula that estmated $85,500 of manufecturing overhead for an estimeted activity level of $45,000 direct labor dolars. At the beginning of the yeat the inventory balances were as follows Work in process Pinished gonds .990 During the year, the following ransactions were completed a. Raw materials purchased for cash, $ 167,000 b. Raw materiais used in production. $143.00D (manerials costing $123,000 were charged directy to jobs; the remaining materia's e Cash paitd for rent during the year was $1e,200 gs1a00 of tnis emount related to sictory cperations, and the iemainder celated bo e. Cash paid for utihy costs in the factory, S10.000 $4,000 ecorded on equpment, $22,000. 6.000 of this amount related to equipment used in factory operations the 56.000 related to equpment used MacBook Air commandoption d. Cash pald for rent during the year was $18,200 ($13,700 of this amount related to factory operations, and the remainder related selling and administretive activities e. Cash paid for utility costs in the factory, $10,000 t. Cash paid for advertising. $14,000. g Depreclation recorded on equipment, $22,000.($16,000 of this amount related to equipment used in factory operations; the remaining $6,000 related to equipment used In selling and administrative activities) h. Manufacturing overhead cost was applied to jobs, $? L Goods that had cost $229,000 to manufacture according to their job cost sheets were completed. J Sales for the year (ail paid in cash) totaled $505,000. The total cost to manufacture these goods according to their job cost sheets was $218,000. t Required 1. Prepare journal entries to record the transactions for the year 2.Prepare T-accounts for each Inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts) 3A. Is Manufacturing Overhead underapplied or overappiled for the year? 3B Prepare a journal entry to close any balonce in the Manufocturing Overhead account to Cost of Goods Sold 4. Prepare an income statement for the year. All of the information needed for the Income statement is avaliable in the journal entries and T-eccounts you have prepared. Complete this question by entering your answers in the tabs below. Rea 38 Rea 4 MacBook Air 3 5 6