Problem 4 (Textbook Re fe rence: P2-4)- Demonstrate job costing Log Cabin Homes, Inc. uses a job cost system to account for its jobs, which are prefabricated houses. As of January 1,2014 ts records showed inventories as follows: Materias and supplies Work in process (Job Nos. 22 and 23) 180,000 Finished goods (Job No. 21) 100,000 $140,000 The work in process inventory consited of two jobs Manufacturing Overhead Direct Job No. Materials Direct Labor S 36,000 40,000 $ S 40,000 28,000 S 76.000 68,000 20,000 96,000 16,000 84,000 36,000 $180,000 23 Cost and sales data for 2014 1. Materias purchased on account, $400,000. 2. Direct materias used: Job No. 22, $60,000; Job No. 23, S120,000; Job No. 24, $180,000. Indirect materials used $10,000. 3. Direct labor costs: Job No. 22 $100,000; Job No. 23, S200,000: and Job No. 24, $80,000. Indirect labor costs, $80,000. 4. Overhead is assigned to jobs at $100 per machine-hours. Job No. 22 used 500 machine-hours, Job No. 23 used 1,000 machine-hours, and Job No. 24 used 300 machine hours in January. S. Job Nos. 22 and 23 were completed and transferred to Finished Goods Inventory 6 Job Nos. 21 and 22 were sold on account for $1.200,000, total 7. Manufacturing overhead costs incurred, other than indirect materials and indirect labor, were depreciation, $80,000, and heat, light, power, miscellaneous, $40,000. Required: a. Prepare journal entries to assign the preceding costs to jobs. Show the appropriate entries debiting Finished Goods Inventory and Cost of Goods Sold. Transfer overapplied or underapplied overhead to Cost of Goods Sold b. Assuming selling and administrative expenses were $100,000, prepare and income statement for 2014