Question No. 3 Wood Inc. is engaged in the manufacturing of furniture to customer order. The uses job order costing. Overhead in the plant is charged based on the direct labor company's predetermined overhead rate for the year is based on the cost forr estimated $120,000 in manufacturing overhead for an estimated allocation $100,000 direct labor dollars. The following transactions were recorded during the As on January 1, 2019 the inventory account balances were as follows; Raw Materials Work in Process Finished Goods $8,000 $6,000 $5,000 aterials, such as wood, paints, polishing items etc., were purchased on , $90,000. aterials were issued to production, $80,000; $10,000 of this amount was for materials. costs incurred and paid $150,000, in what direct labor is $130,000 and labor, $10,000; and selling and administrative salaries, $10,000. ilities costs incurred, $10,000. ation recorded for the year, $30,000 ($5,000 on selling and administrative $25,000 on machineries in the plant). insurance expired, $4,800 ($4,000 plant, and $800 related to selling and strative activities). g expenses incurred, $40,000. nanufacturing overhead costs incurred, $37,000 (credit Accounts Payable). cturing overhead was applied to production. Overhead is applied on the direct labor cost. Due to greater than expected demand for its products, the i) Manufacturing overhead was applied to production. Overhead is applied basis of direct labor cost. Due to greater than expected demand for its produ company worked 110,000 machine-hours on all jobs during the year. j) Furniture that cost $310,000 according to their job cost sheets were manufa k) Sales for the year totaled $750,000 and were all on account. The total furniture was $200,000 according to their job cost sheets. You are required to 1. Prepare journal entries to record the transaction above. 2. Prepare necessary ledger accounts 3. Calculate manufacturing cost is under applied or over applied. Prepare journ to adjust the under applied or over applied overhead. 4. Prepare an income statement for the year