Problem 19-2A Source documents, journal entries, overhead, and financial reports LO P1, P2, P3, P4

[The following information applies to the questions displayed below.] Bergamo Bay's computer system generated the following trial balance on December 31, 2017. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Payroll Payable) has not been recorded.

	Debit	Credit
Cash	$66,000
Accounts receivable	44,000
Raw materials inventory	27,000
Work in process inventory	0
Finished goods inventory	9,000
Prepaid rent	3,000
Accounts payable		$10,200
Notes payable		13,200
Common stock		30,000
Retained earnings		93,000
Sales		172,600
Cost of goods sold	104,000
Factory overhead	28,000
Operating expenses	38,000
Totals	$319,000	$319,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:	$4,400	direct materials to Job 402
Materials requisition 21-3011:	$7,500	direct materials to Job 404
Materials requisition 21-3012:	$1,600	indirect materials
Labor time ticket 6052:	$6,000	direct labor to Job 402
Labor time ticket 6053:	$7,000	direct labor to Job 404
Labor time ticket 6054:	$3,000	indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 19-2A Part 1

1. Direct materials costs to Work in Process Inventory.
2. Direct labor costs to Work in Process Inventory.
3. Overhead costs to Work in Process Inventory.
4. Indirect materials costs to the Factory Overhead account.
5. Indirect labor costs to the Factory Overhead account.

1. Prepare journal entries to assign the above costs.

Problem 19-2A Part 2

2.1 Determine the revised balance of the Factory Overhead account after making the entries in part 1 using T-accounts. Determine whether there is any under- or overapplied overhead for the year.

2.2 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material.

Problem 19-2A Part 3

3. Prepare a revised trial balance.

Problem 19-2A Part 4

4. Prepare an income statement for 2017 and a balance sheet as of December 31, 2017.

Revised Factory Overhead account Ending balance from trial balance BERGAMO BAY COMPANY Trial Balance December 31,2017 Debit Credit Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable Common stock Retained earnings Sales Cost of goods sold Factory overhead Operating expenses Totals Prepare an income statement for 2017. BERGAMO BAY COMPANY Income Statement For Year Ended December 31, 2017 0 0 Prepare a balance sheet as of December 31, 2017. BERGAMO BAY COMPANY Balance Sheet December 31, 2017 Assets Inventories Total assets Liabilities and equity Total liabilities Total stockholders' equity Total liabilities and equity 0) Revised Factory Overhead account Ending balance from trial balance BERGAMO BAY COMPANY Trial Balance December 31,2017 Debit Credit Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable Common stock Retained earnings Sales Cost of goods sold Factory overhead Operating expenses Totals Prepare an income statement for 2017. BERGAMO BAY COMPANY Income Statement For Year Ended December 31, 2017 0 0 Prepare a balance sheet as of December 31, 2017. BERGAMO BAY COMPANY Balance Sheet December 31, 2017 Assets Inventories Total assets Liabilities and equity Total liabilities Total stockholders' equity Total liabilities and equity 0)