Learning Objectives 2, 3, 4, 5 4. COGM $47,430 5. Operating Income $18,950 P17-32A Preparing comprehensive accounting for manufacturing transactions Mighty Stars produces stars for elementary teachers to reward their students. Mighty Stars' trial balance on June 1 follows: Account Title Cash Accounts Receivable Inventories: Raw Materials Work-in-Process MIGHTY STARS Trial Balance June 1, 2018 Finished Goods Property, Plant, and Equipment Accumulated Depreciation Accounts Payable Wages Payable Common Stock Retained Earnings Sales Revenue Cost of Goods Sold Manufacturing Overhead Selling and Administrative Expenses Totals Balance Debit $ 14,000 160,000 6,000 40,000 20,400 220,000 0 0 0 $ 460,400 Credit $ 75,000 134,000 2,600 139,000 109,800 $ 460,400 f. Wages incurred during June, $39,000. Labor time records for the month: Job 120, $3,600; Job 121, $17,000; indirect labor, $18,400. g. Wages paid in June include the balance in Wages Payable at May 31 plus $36,100 of wages incurred during June. h. Depreciation on plant and equipment, $2,500. i. Manufacturing overhead allocated at the predetermined overhead allocation rate of 80% of direct labor costs. j. Jobs completed during the month: Job 120 with 700,000 Large Stars at a total cost of $47,430. k. Sales on account: all of Job 120 for $104,000. 1. Adjusted for overallocated or underallocated manufacturing overhead. Requirements 1. Journalize the transactions for the company. 2. Open T-accounts for the general ledger, the Raw Materials Inventory subsidiary ledger, the Work-in-Process Inventory subsidiary ledger, and the Finished Goods Inventory subsidiary ledger. Insert each account balance as given, and use the ref- erence Bal. Post the journal entries to the T-accounts using the transaction letters as a reference. 3. Prepare a trial balance at June 30, 2018. 4. Use the Work-in-Process Inventory T-account to prepare a schedule of cost of goods manufactured for the month of June. 5. Prepare an income statement for the month of June. June 1 balances in the subsidiary ledgers were as follows: Raw Materials Inventory subsidiary ledger: Paper, $4,000; indirect materials, $2,000 Work-in-Process Inventory subsidiary ledger: Job 120, $40,000; Job 121, $0 Finished Goods Inventory subsidiary ledger: Large Stars, $9,900; Small Stars, $10,500 June transactions are summarized as follows: a. Collections on account, $145,000. b. Selling and administrative expenses incurred and paid, $32,000. c. Payments on account, $39,000. d. Materials purchases on account: Paper, $24,000; indirect materials, $4,200. e. Materials requisitioned and used in production: Job 120: Paper, $950 Job 121: Paper, $7,900 Indirect materials, $1,200