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 $103,500 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 Work in process Finished goods $ 10, 700 $ 5,000 $ 8,400 During the year, the following transactions were completed: a. Raw materials purchased on account, $ 165,000. b. Raw materials used in production, $148,000 (materials costing $120,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: 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. View transaction list Journal entry worksheet Raw materials purchased on account, $165,000. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 3 4 5 6 7 8 ..... 11 Raw materials used in production, $148,000 (materials costing $120,000 were charged directly to jobs; the remaining materials were indirect). Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet Rent for during the year was $18,300 ($13,900 of this amount related to factory operations, and the remainder related to selling and administrative activities). Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet Depreciation recorded on equipment, $24,000. ($ 16,000 of this amount related to equipment used in factory operations; the remaining $ 8,000 related to equipment used in selling and administrative activities.) Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet Goods that had cost $227,000 to manufacture according to their job cost sheets were completed. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal