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: ces Raw materials Work in process Finished goods $18,500 $11,000 $10,500 The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,500 machine-hours and incur $164,250 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: $195,000 (80% direct and 20% Indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $164,000 $ 28,000 $37,500 $82,000 13 d. Heat, power, and water costs were incurred in the factory: $44,250. e. Prepaid insurance expired during the year: $12,500 (85% relates to factory operations, and 15% relates to selling and administrative activities). f Advertising costs were incurred. $52,500 g. Depreciation was recorded for the year $63,000 (90% relates to factory operations, and 10% relates to selling and administrative activities) h. Manufacturing overhead cost was appited to production. The company recorded 41,000 machine-hours for the year Goods that cost $502.000 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. Sales for the year totalled $723.300 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $496,000 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 inventory accounts). Compute an ending balance in each account. Raw Materials Beg. Bal End. Bai Manufacturing Overhead Beg. Bal, End. Bal Work in Process Cost of Goods Sold Beg Bal Beg Bal End Bal End. Bal Finished Goods Beg Bal R 3-a. Is manufacturing overhead underapplied or overapplied for the year? O Underapplied overhead O Overapplied overhead 3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Do not round Intermediate calculations and round your 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.) View transaction list Journal entry worksheet < A Record the entry to properly dispose of any balance in the Manufacturing Overhead account. Noto: Enter debts before credits Event General Journal Debit Credit 4. Prepare an income statement for the year. (Do not round Intermediate calculations and round your final answers to nearest whole dollar amount.) RAVSTEN COMPANY Income Statement For the Year Ended December 31 Selling and administrative expenses 2