Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows: $ 46,200 Morrison Company Balance Sheet January 1 Assets Cash Raw materials Work in process Finished goods Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $15,300 7,550 25,800 48,650 2,225 126,000 $ 223,075 $ 13,800 209,275 $ 223,075 During January the company completed the following transactions: a. Purchased raw materials on account, $85,600. b. Raw materials used in production, $96,800 ($77,000 was direct materials and $19,800 was indirect materials). C. Paid $182,350 of salaries and wages in cash ($95,200 was direct labor, $35,250 was indirect labor, and $51,900 was related to employees responsible for selling and administration). d. Various manufacturing overhead costs incurred (on account) to support production, $37,650. e. Depreciation recorded on property, plant, and equipment, $64,400 (70% related to manufacturing equipment and 30% related to assets that support selling and administration). f. Various selling expenses paid in cash, $41,900. g. Prepaid insurance expired during the month, $1,350 (80% related to production, and 20% related to selling and administration). h. Manufacturing overhead applied to production, $138,600. i. Cost of goods manufactured, $302,900. j. Cash sales to customers, $415,440. k. Cost of goods sold (unadjusted), $299,600. 1. Cash payments to creditors, $80,200. m. Underapplied or overapplied overhead $? Required: 1. Calculate the ending balances that would be reported on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet.) 2. What is Morrison Company's net operating income for the month of January? Required 1 Required 2 Calculate the ending balances that would be reported on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplier account for its affect on the balance sheet.) (Amounts to be deducted should be indicated by a minus sign.) Transactions Prepaid Expenses PP&E (net) = $ 2,225 $ 126,000 = Accounts Retail Payable Earni $ 13,800 $ 209 85,600 = (51 Morrison Company Transaction Analysis For the Month Ended Jaunary 31 Raw Work in Finished Cash Manufacturing Materials Process Goods Overhead $ 46,200 $ 15,300 $ 7,550 $ 25,800 $ 0 85,600 (96,800) 77,000 19,800 (182,350) 95,200 35,250 37,650 45,080 (41,900) 1,080 138,600 (138,600) | (302,900) 302,900 415,440 (299,600) (80,200) 37,650 (64,400) = (19 Beginning balances @1/1 (a) Raw material purchases (b) Raw materials used in production (c) Salaries and wages (d) Various overhead costs (e) Depreciation (1) Various selling expenses (9) Expiration of prepaid insurance (h) Manufacturing overhead applied (1) Cost of goods manufactured 0) Sales (k) Cost of goods sold (1) Payments to creditors (m) Overapplied overhead Ending balances @ 1/31 (41 (1,350) = = 414 = (299 = (80,200) Morrison Company Transaction Analysis For the Month Ended Jaunary 31 Work in Finished Manufacturing Process Goods Overhead $ 7,550 $ 25,800 $ 0 Cash Raw Materials Prepaid PP&E (net) Expenses $ 2,225 $ 126,000 $ 46,200 $ balances @1/1 ial purchases ials used in production = Accounts Retained Payable Earnings $ 13,800 $ 209,275 85,600 15,300 85,600 (96,800) 77,000 id wages (182,350) 95,200 (51,900) 19,800 35,250 37,650 45,080 erhead costs 37,650 on (64,400)| (41,900) (19,320) (41,900) (270) (1,350) lling expenses of prepaid insurance ring overhead applied ods manufactured 1,080 (138,600) 138,600 (302,900) 302,900 415,440 415,440 (299,600) (299,600) ods sold to creditors d overhead (80,200) (80,200) ances @ 1/31 Required 1 Required 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is Morrison Company's net operating income for the month of January? Net operating income Required 1 Required 2 >
