Problem 7-65 (Algo) Tracing Costs in a Job Company ( LO 7-2, 3) Edwin Parts, a job shop, recorded the following transactions in May: 1. Purchased $87,460 in materials on account. 2. Issued $3,780 in supplies from the materials inventory to the production department. 3. Issued $43,860 in direct materials to the production department. 4. Paid for the materials purchased in transaction (i). 5. Incurred wage costs of $68,240, which were debited to Payroll, a temporary account. Of this amount, $22,560 was with payroll taxes and credited to Payroll Taxes Payable. The remaining $45,160 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. 6. Recognized $34,960 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,960 was debited to Payroll and credited to Fringe Benefits Payable. 7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, indirect monufacturing labor; and 20 percent, administrative and marketing costs. 8. Applied overhead on the basis of 140 percent of direct labor costs. 9. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $41,560. 10. Recognized depreciation of $26,560 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Edwin Parts are shown as follows. Prepare T-accounts to show the flow of costs during the period