III. Manufacturing and Absorption Costing (38 points) 1. What journal entries did Steinway record for inventory obsolescence (inventory reserves) in 2012? Assume that the allowance for obsolescence pertains to finished goods inventory; there are no proceeds on obsolete inventory disposed of (i.e., they destroy it) and obsolescence expense is included in other operating expenses on the income statement. (6 points) 2. Assume that Steinway's production process involves 40% raw materials, 40% labor and 20% overhead (i.e., those are the proportions of costs which go into work in process). Assume all purchases are on credit (accounts payable), salaries are paid in cash and all overhead is depreciation. What were all of the journal entries (other than the obsolescence journal entry above) that explain the change in each of the inventory accounts (your entries along, with those in question 1., should explain the changes in raw materials, work-in-process and finished goods accounts). Note that you will need to use the answer to question 1 to solve the problem. (19 points)