Part I only Required 4. How did 4-30 Journal entries, T-accounts, and source documents. Virtual Company produces gadgets for coveted small appliance market. The following data reflect activity for the year 2020: Costs incurred: Purchases of direct materials (net) on credit Direct manufacturing labor cost Indirect labor Depreciation, factory equipment $125,000 88,000 54,700 36,000 Depreciation, office equipment 7,300 Maintenance, factory equipment 26,000 Miscellaneous factory overhead 9,600 Rent, factory building 70,000 Advertising expense 92,000 Sales commissions 36,000 Inventories: January 1, 2020 December 31, 2020 Direct materials $9,700 $13,000 Work in process Finished goods 6,200 24,000 66,000 32,000 Virtual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $2.50 per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials. 1. Prepare journal entries to record the transactions for 2020, including an entry to close out under- or overallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. 2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.