Manor Painting is a commercial interior and exterior painting contractor specializing in commercial buildings. An inventory of materials and equipment is on hand at all times, so work can start as quickly as possible. Special equipment is ordered as required. On August 1, the Materials Inventory account had a balance of $55,400. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on August 1 with the following costs:

Job 84 Job 87 Materials and equipment $ 24,500 $ 80,200 Direct labor 21,700 40,800 Overhead (applied) 8,680 16,320 Overhead has been applied at 40 percent of the costs of direct labor using an annual rate.

During August, Manor Painting started two new jobs. Additional work was carried out on Jobs 84 and 87. Job 87 was completed and billed to the customer. Details on the costs incurred on jobs during August follow:

Job 84 Job 87 Job 88 Job 90 Materials and equipment $ 5,900 $ 8,600 $ 8,300 $ 5,800 Direct labor (wages payable) 9,200 11,500 10,300 3,800 Other August Events

Purchased materials and equipment for $15,500. Billed $196,400 to the customer for Job 87 and received payment for $116,400 of that amount. Received $20,000 payment on Job 82 delivered to customer in July. Determined that payroll for indirect labor personnel totaled $2,380. Issued supplies and incidental materials for current jobs costing $890. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation): Property taxes $ 1,040 Storage area rental 1,190 Truck and delivery cost 1,770 Advertising and promotion campaign 1,340 Inspections 1,040 Telephone and other miscellaneous 820 Equipment depreciation 2,860 Required: Prepare journal entries to record the flow of costs for operations during August.

Calculate the amount of over- or underapplied overhead for the month. This amount is debited or credited to Cost of Goods Sold.

Determine inventory balances for Materials and Equipment Inventory and Work-in-Process Inventory.