Problem 5-19 Journal Entries; T-Accounts; Cost Flows [L04, L05, L07] Ravsten Company uses ajoborder costing system. On January 1. the beginning of the current year, the company's inventory balances were as follows: Raw materials $28,888 Work in process $11,688 Finished goods $38,888 The company applies overhead cost tojobs on the basis of machinehours. For the current year, the company estimated that it would work 36,800 machinehours and incur $171,120 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased on account: $216,000. b. Raw materials were requisitioned for use in production: $198,000 (80% direct and 20% indirect). c. The following costs were incurred for employee services: Direct labour $166,488 Indirect labour $ 28,688 Sales commissions $ 38,488 Administrative salaries $ 83,288 d. Heat, power. and water costs were incurred in the factory: $45,600. e. Prepaid insurance expired during the year: $14,000 (85% relates to factory operations, and 15% relates to selling and administrative activities]. f. Advertising costs were incurred. $54,000. g. Depreciation was recorded for the year: $64,800 (90% relates to factory operations, and 10% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 41,600 machinehours for the year. i. Goods that cost $515,400 to manufacture according to theirjob cost sheets were transferred to the nished goods warehouse. j. Sales for the year totalled $737,200 and were all on account. The total cost to manufacture these goods according to theirjob cost sheets was $508,800. Required: 1. Prepare journal entries to record the transactions given above. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2 3 4 5 6 7 8 11 Raw materials were purchased on account: $216,000. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal2. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. Raw Materials Manufacturing Overhead Beg. Bal. Beg. Bal. End. Bal. End. Bal. Work in Process Cost of Goods Sold Beg. Bal. Beg. Bal. End. Bal. End. Bal. Finished Goods Beg. Bal. End. Bal3-a. Is manufacturing overhead underapplied or overapplied for the year? O Overapplied overhead O Underapplied overhead 3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Do not round intermediate calculations and round your final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet A Record the entry to properly dispose of any balance in the Manufacturing Overhead account. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal4. Prepare an income statement for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.) Selling and administrative expenses