MS Company produces reproductions of antique residential moldings at a plant located in Indang, Cavite. Since there are hundreds of products, some o which are made only to order, the company uses a job-order costing system. On July 1, the start of the company's fiscal year, inventory account balances were as follows: Raw materials Work in process Finished goods Total P10,000 4,000 8,000 P22,000 The company applies overhead cost to jobs on the basis of machine-hours using the same principles followed by companies in the Philippines and elsewhere. For the fiscal year starting July, it was estimated that the plant would operate 45,000 machine-hours and incur P99,000 in factory overhead cost. During the year, the following transactions were completed: Raw materials purchased on account, P160,000. Raw materials requisitioned for use in production, P140,000 (materials costing P120,000 were chargeable directly to jobs; the remaining materials were indirect) Costs for employee services were incurred as follows a. c. Direct labor Indirect labor Sales commissions Administrative salaries P90,000 60,000 20,000 50,000 d. Prepaid insurance expired during the year, P18,000 (P13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, P10,000. f. Advertising costs incurred, P15,000. g. Depreciation recorded on equipment, P25,000. (P20,000 of this amount was on equipment used in factory operations; the remaining P5,000 was on equipment used in selling and administrative activities) h. Factory overhead cost was applied to production, P110,000, (The company recorded 50,000 machine-hours of operating time during the i. Goods that had cost P310,000 to manufacture according to their job cost j. Sales (all on account) to customers during the year totaled P498,000. year.) sheets were transferred into the finished goods warehouse. These goods had cost P308,000 to manufacture according to their job cost sheets REQUIRED: 1. Prepare journal entries to record the transactions for the year 2. Prepare T-accounts for Inventories, Factory Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts) Compute an ending balance in each account. 3. Is Factory Overhead underapplied or overapplied for the year? Prepare a journal entry to close any balance in the Factory Overhead account to Cost of Goods Sold. Prepare an income statement for the year. (Prepare a schedule of cost of goods manufactured; all of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.) 4