Problem 8-63 (Static) Prepare a Production Cost Report and Adjust Inventory Balances: Weighted- Average Method (LO 8-3, 4) The records of Tillman Corporation's Initial and unaudited accounts show the following ending Inventory balances, which must be adjusted to actual costs: Work-in-process inventory Finished goods inventory Units 48,000 15,000 Unaudited Costs $ 242,880 105,300 As the auditor, you have learned the following Information. Ending work-in-process Inventory is 35 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 90 percent of the direct labor costs. There was no finished goods Inventory at the start of the period. The following additional Information is also available: Costs Beginning inventory (25% complete as to labor) Units 32,000 Direct Materials $ 116,640 Direct Labor $14,240 Units started 118,000 Current costs 436,860 199,600 Units completed and transferred to finished goods inventory 102,000 Required: a. Prepare a production cost report for Tillman using the weighted-average method. b. Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference. c. If the adjustment In requirement (b) is not made, will the company's Income and Inventories be overstated or understated? Complete this question by entering your answers in the tabs below. Required A Required B Required C If the adjustment in requirement (b) is not made, will the company's income and inventories be overstated or understated? Income would have been Work in process would have been Finished goods would have been