Production Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year

2014:

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ProductionProduction

Co. uses a normal-costing system and allocates overhead to work in process at a rate of

$2.80

per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials.

Requirements

1.	Prepare journal entries to record the transactions for 2014 including an entry to close out over- or underallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry.
2.	Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.

Requirement 1. Prepare journal entries to record the transactions for

2014

including an entry to close out over- or underallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. (Record debits first, then credits. Exclude explanations from any journal entries.)Record the purchase of direct materials,

$123,000.

Costs incurred:
Purchases of direct materials (net) on credit	$123,000
Direct manufacturing labor cost	82,000
Indirect labor	54,800
Depreciation, factory equipment	34,000
Depreciation, office equipment	7,300
Maintenance, factory equipment	26,000
Miscellaneous factory overhead	9,600
Rent, factory building	70,000
Advertising expense	90,000
Sales commissions	32,000