Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows:

Morrison Company
Balance Sheet
January 1
Assets
Cash				$	44,250
Raw materials	$	11,100
Work in process		7,050
Finished goods		28,500			46,650
Prepaid expenses					2,075
Property, plant, and equipment (net)					224,000
Total assets				$	316,975
Liabilities and Stockholders Equity
Accounts payable				$	13,900
Retained earnings					303,075
Total liabilities and stockholders equity				$	316,975

During January the company completed the following transactions:

1. Purchased raw materials on account, $86,200.
2. Raw materials used in production, $94,200 ($82,400 was direct materials and $11,800 was indirect materials).
3. Paid $195,800 of salaries and wages in cash ($113,600 was direct labor, $44,250 was indirect labor, and $37,950 was related to employees responsible for selling and administration).
4. Various manufacturing overhead costs incurred (on account) to support production, $39,450.
5. Depreciation recorded on property, plant, and equipment, $103,600 (70% related to manufacturing equipment and 30% related to assets that support selling and administration).
6. Various selling expenses paid in cash, $27,950.
7. Prepaid insurance expired during the month, $1,250 (80% related to production, and 20% related to selling and administration).
8. Manufacturing overhead applied to production, $150,800.
9. Cost of goods manufactured, $307,300.
10. Cash sales to customers, $421,880.
11. Cost of goods sold (unadjusted), $304,200.
12. Cash payments to creditors, $72,800.
13. Underapplied or overapplied overhead $? .

Required:

1. Calculate the ending balances that would be reported on the company's balance sheet on January 31^st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet.)

2. What is Morrison Companys net operating income for the month of January?

Morrison Company Transaction Analysis For the Month Ended Jaunary 31 Work in Process Finished Manufacturing Prepaid PP&E (net) Raw Materials ransactions Cash Overhead PayableEarnings 0$2,075$ 224,000 13,900 303,075 Beginning balances @1/1 (a) Raw material purchase (b) Raw materials used in production (c) Salaries and wages (d) Various overhead costs (e) Depreciation (1) Various selling expenses (g) Expiration of prepaid insurance (h) Manufacturing overhead applied () Cost of goods manufactured $ 44,250$11,100 $ 7,050$ 28,500$ Sales (k) Cost of goods sold () Payments to creditors Ending balances1/31 $ 120,400