On December 31, Year 1, Zeus Manufacturing reported the following balances in its inventory accounts: The following events occurred during Year 2:

a) purchased raw materials for cash, $375,000

b) raw materials used to make products, $359,500

c) direct labor costs of $204,000 were paid in cash

d) estimated overhead applied to work in process, $183,600

e) paid cash for actual overhead costs, $180,500

f) completed products that cost $704,500

g) sold goods that had cost $696,000 for $985,000 cash

h) paid cash for selling and administrative expenses, $206,000

Required:

1) Prepare Zeus' schedule of cost of goods manufactured and sold for Year 2. (16 points)

2) Prepare the income statement for Year 2. (5 points)