Problem 3A-4 (Algo) Transaction Analysis [LO3-5] Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows: Morrison Company Balance Sheet January 1 Assets Cash $ 40,950 Raw materials $ 17,800 Work in process 6,600 Finished goods 31,800 56,200 Prepaid expenses 3,350 Property, plant, and equipment (net) 124,000 Total assets $ 224,500 Liabilities and Stockholders Equity Accounts payable $ 7,100 Retained earnings 217,400 Total liabilities and stockholders equity $ 224,500 During January the company completed the following transactions: Purchased raw materials on account, $75,200. Raw materials used in production, $91,500 ($80,200 was direct materials and $11,300 was indirect materials). Paid $202,100 of salaries and wages in cash ($108,800 was direct labor, $41,700 was indirect labor, and $51,600 was related to employees responsible for selling and administration). Various manufacturing overhead costs incurred (on account) to support production, $43,350. Depreciation recorded on property, plant, and equipment, $63,600 (70% related to manufacturing equipment and 30% related to assets that support selling and administration). Various selling expenses paid in cash, $41,600. Prepaid insurance expired during the month, $2,100 (80% related to production, and 20% related to selling and administration). Manufacturing overhead applied to production, $138,600. Cost of goods manufactured, $309,200. Cash sales to customers, $422,160. Cost of goods sold (unadjusted), $304,400. Cash payments to creditors, $64,200. Underapplied or overapplied overhead $? . Required: 1. Calculate the ending balances that would be reported on the company's balance sheet on January 31st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet.) 2. What is Morrison Companys net operating income for the month of January?