Problem E Green Thumb Landscaping Company uses a job cost system. As of January 1, its records showed the following inventory balances:

Materials (shrubs, trees, etc.)	$ 13,500
Work in process	25,800
Finished goods (Job No. 211)	30,000

The work in process inventory consisted of two jobs:

Job No.	Direct Materials	Direct Labor	Manufacturing Overhead	Total
212 10 Downing St.	$4,500	$ 6,000	$2,400	$12,900
213 1010 Wilshire Blvd.	5,100	4,800	3,000	12,900
	$9,600	$10,800	$5,400	$25,800

Here are data for the company for January:

Materials purchased, $48,000.

Landscaping direct labor costs: direct labor to Job No. 212, $12,000; to Job No. 213, $24,000; and to Job No. 214, $36,000. Indirect labor, $30,000.

Direct materials used: direct materials for Job No. 212, $7,800; for Job No. 213, $14,400; and for Job No. 214, $24,000. Supplies (indirect materials) used amounted to $1,200.

Overhead is assigned to jobs at $3 per labor-hour, with 8,000 labor-hours to Job 212 and 2,000 labor-hours each to Jobs 213 and 214.

Jobs 212 and 213 were completed and in Finished Goods Inventory at the end of January.

Sales revenues for January were $45,000; cost of goods sold was $30,000 for Job No. 211 that was in Finished Goods Inventory on 2010 January 1.

Overhead costs incurred other than indirect labor and indirect materials were depreciation, $3,000, and utilities, fuel, and miscellaneous, $3,000.

1. Prepare journal entries to record the preceding transactions, including the transfer of underapplied or overapplied overhead to Cost of Goods Sold.
2. Assuming selling and administrative expenses were $10,000, prepare an income statement for January.