Ravsten Company uses a job$-$order costing system. On January $1,$ the beginning of the current year, the company$$s inventory balances were as follows:

Raw materials $ $18,000$

Work in process $ $12,000$

Finished goods $ $34,000$

The company applies overhead cost to jobs on the basis of machine$-$hours. For the current year, the company estimated that it would work $36,000$ machine$-$hours and incur $$160,200$ in manufacturing overhead cost. The following transactions were recorded for the year:

a$)$ Raw materials were purchased on account: $$210,000.$

b$)$ Raw materials were requisitioned for use in production: $$200,000(80\%$ direct and $20\%$ indirect$).$

c$)$ The following costs were incurred for employee services:

Direct labour $ $170,000$

Indirect labour $ $29,000$

Sales commissions $ $38,000$

Administrative salaries $ $84,000$

d$)$ Heat, p

e$)$ Prepaid insurance expired during the year: $$12,000(90\%$ relates to factory operations, and $10\%$ relates to selling and administrative activities$).$

f$)$ Advertising costs were incurred, $$52,000.$

g$)$ Depreciation was recorded for the year: $$62,000(85\%$ relates to factory operations, and $15\%$ relates to selling and administrative activities$).$

h$)$ Manufacturing overhead cost was applied to production. The company recorded $40,000$ machine$-$hours for the year.

i$)$ Goods that cost $$504,000$ to manufacture according to their job cost sheets were transferred to the finished goods warehouse.

j$)$ Sales for the year totalled $$770,000$ and were all on account. The total cost to manufacture these goods accordi

Required:

$1.$ Prepare journal entries to record the transactions given above. $($Do not round intermediate calculations. If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

$2.$ Prepare T$-$accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T$-$accounts $($don$$t forget to enter the opening balances in your inventor

$3-$a$.$ Is manufacturing overhead underapplied or overapplied for the year?

multiple choice

Underapplied overhead

Overapplied overhead

$3-$b$.$ Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. $($Round your percentages and final answers to $2$ decimal places. If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.$)$

$4.$ Prepare an income statement for the year. $($Do not round intermediate calculations and round your final answers to nearest whole dollar amount.$)$