Inventory balances at the beginning of the current year follow: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory $ 16,300 6,800 20,200 The following transactions occurred during January: a. Purchased materials on account for $26,700. b. Issued materials to production totaling $20,200, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials. c. Payroll costs totaling $16,600 were recorded as follows: $10,400 for assembly workers $2,900 for factory supervision $1,500 for administrative personnel $1,800 for sales commissions d. Recorded depreciation: $4,200 for factory machines, $800 for the copier used in the administrative office. e. Recorded $1,700 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. f. Paid $6,400 in other factory costs in cash. g. Applied manufacturing overhead at a rate of 200 percent of direct labor cost. h. Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,500 for direct materials, $2,300 for direct labor, and $4,600 for applied overhead. i. Sold jobs costing $50,600. The revenue earned on these jobs was $65,780. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work in Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling, General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over- or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold.

Inventory balances at the beginning of the curtent year follow: The following transactions occurted during January. a. Purchased materials on account for $26,700 b. Issued materials to production totaling $20,200,90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials: c. Payroll costs totaling $16,600 were recorded as follows: $10,400 for assembly workers $2,900 for factory supervision \$1,500 for administrative personnei $1,800 tor sales commissions d. Recorded depreciation $4,200 for factory machines, $800 for the copier used in the administrative office. e. Recorded $1,700 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense. 1. Paid $6.400 in other factory costs in cash. g. Applied manufacturing overhead at a rate of 200 percent of direct labor cost. h. Completed all jobs but one; the job cost sheet for the uncompleted job shows $2,500 for direct materials, $2,300 for direct labor. and $4,600 for applied overhead. i. Sold jobs costing $50,600 The revenue earned on these jobs was $65,780 Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts. o. Raw Materials Inventory b. Work in Process Inventory c. Finished Goods Inventory. d. Cost of Goods Sold e. Manufacturing Ovethead f. Selling. General, and Administrative Expenses. g. Sales Revenue Inventory batances at the beginning of the current year follow: The following transactions occurred during tanuary. a. Purchased materials on account for $26,700 b. Issued materials to production totating $20,200,90 percent of which was traced to specific jobs and the remainder of which was treoted as indirect materials c. Payroll costs totating $16,600 were recorded as follows $10,400 for assembly workers $2,900 for factory supervision $1,500 for administrative personnel $1,800 for sales commissions d. Recorded depreciation $4,200 for factory machines, $800 for the copier used in the odministrative office: e. Recorded $1,700 of expired insurance. Forty percent was insurance on the manufocturing facility. with the remasinder ciassified as an administrative expense f. Paid $6,400 in other factory costs in cash 9. Applied manufacturing overhead at a rate of 200 percent of direct labor cost. h. Completed all jobs but orie, the job cost sheet for the uncompleted job stiows $2,500 for direct materials, $2,300 for direct labor, and $4,600 for applied overhead. L. Sold jobs costing $50,600. The reverue carned on these jobs was $65,780. Required: 1. Set up T-accounts, record the beginning badarices, post the January transactions, and compute the final balance for the foilowing accounts B. Raw Materials Inveritory b. Work in Process Inventory. c. Panshed Goods Inventory d. Cost of Goods Sold e. Manufacturing Overtiead f. Seling, General, and Administrative Experses. g. Sales Revenue 2. Determine how miach gross peofit the company would report during the month of January before any adivatment is madie for the overitiead balance. 3. Determine the amount of over or underapolied overhead. 4. Compute adjusted gross profit assuming that ary over of underapglied overhead balance is adjusted derecty to Cost of Goods Sold