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

Morrison CompanyBalance SheetJanuary 1AssetsCash$44,250Raw materials$11,100Work in process7,050Finished goods28,50046,650Prepaid expenses2,075Property, plant, and equipment (net)224,000Total assets$316,975Liabilities and Stockholders' EquityAccounts payable$13,900Retained earnings303,075Total 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 Company's net operating income for the month of January?

What is Morrison Company's net operating income for the month of January?

Net operating income