Gold Nest Company of Guandong, China, is a fomlly-owned enterprise that makes birdcages for the South China market. The company sells its birdcoges through an extensive network of street vendors who recelve commissions on their sales. The company uses a job-order costing system in which overhead is opplied to jobs on the basis of direct labor cost. its predetermined overhead rate is based on a cost formula that estimated $95,000 of manufacturing overhead for an estimated activity level of $50,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: During the year, the following transactions were completed: a. Raw materials purchased on account, $163,000. b. Raw materlals used in production, $145,000 (materials costing $128,000 were charged directly to jobs; the remaining materiais were indirect). c. Costs for employee services were incurred as follows: d. Rent for the year was. $18,800 ( $13,400 of this amount related to foctory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $18,000. 1. Advertising costs incurred, $13,000. 9. Depreclation recorded on equipment, $21,000. ($16,000 of this amount related to equipment used in factory operations, the remaining $5,000 related to equipment used in sealing and administrative octivities.) h. Manufacturing overhead cost was opplied to jobs, $ ? 1 Goods that had cost $225,000 to manufacture according to their job cost sheets were completed. 1. Sales for the year (all pold in cash) totaled $516,000. The total cost to manufocture these goods according to their job cost sheets was $219,000. 1. Manuracturing overtiead cost was applied to jobs, $? 1. Goods thot had cost $225,000 to manufacture according to their job cost sheets were completed 1. Sales for the year (all paid in cash) totaied $516,000. The total cost to manufacture these goods according to their job cost sheets was $219,000. Required: 1. Prepare journat entries to record the transactions for the year. 2. Prepare Traccounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your fournal entries to these T-eccounts (don't forget to enter the beginning balances in your inventory accounts). 3A. is Manutocturing Overhead underapplied or overapplied for the year? 38, 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 ng eded for the income statement is available in the journat entries. and Treccounts you have prepared. Complete this question by entering your answers in the tabs below
