Required information Problem 19-3A (Algo) Computing and recording job costs; preparing income statement and balance sheet LO P1, P2, P3, P4 [The following information applies to the questions displayed below.] Bergo Bay's accounting system generated the following account balances on December 31. The company's manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Notes payable Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals Debit $ 80,000 49,000 Credit 29,500 0 9,000 3,000 $ 11,200 14,200 30,000 84,000 207,100 101,000 27,000 48,000 $ 346,500 $ 346,500 These six documents must be processed to bring the accounting records up to date. Materials requisition 10: Materials requisition 11: Materials requisition 12: Labor time ticket 52: Labor time ticket 53: Labor time ticket 54: $ 4,500 direct materials to Job 402 $ 7,100 direct materials to Job 404 $ 1,700 indirect materials $ 4,000 direct labor to Job 402 $ 16,000 direct labor to Job 404 $ 5,000 indirect labor Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost. Problem 19-3A (Algo) Part 1 a. Direct materials. b. Direct labor. c. Overhead applied. d. Indirect materials. e. Indirect labor. Required: 1. Use the document information above to prepare journal entries for the above costs. View transaction list View journal entry worksheet No Transaction General Journal 1 a. Work in process inventory Raw materials inventory Debit Credit 11,600 11,600 2 b. Work in process inventory Factory wages payable 20,000 20,000 3 C. Work in process inventory 30,000 Factory overhead 30,000 4 d. Factory overhead 1,700 Raw materials inventory 1,700 5 e. Factory overhead 5,000 Factory wages payable 5,000 - Problem 19-3A (Algo) Part 2 2-a. In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of over- or underapplied overhead. 2-b. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Req 2A Req 2B In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of over- underapplied overhead. Actual overhead (given) Indirect materials Indirect labor Factory Overhead 27,000 30,000 Overhead applied 1,700 5,000 > Req 2A Req 2B > Problem 19-3A (Algo) Part 3 3. Prepare a revised list of account balances as of December 31. Hint: Use the prior year's Retained Earnings balance of $84,000 in this list. Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable BERGO BAY COMPANY List of Account Balances December 31 Debit Credit $ 80,000 49,000 16,200 52,000 9,000 3,000 11,200 25,000 14,200 30,000 84,000 207,100 114,000 27,000 48,000 $ 398,200 $ 371,500 Common stock Retained earnings (prior year) Sales Cost of goods sold Factory overhead General and administrative expenses Totals 4. Prepare an income statement for the year and a balance sheet as of December 31. Hint: Retained earnings is $138,400 at the end of the current year. 5. Assume that the $1,700 on materials requisition 12 should have been direct materials charged to Job 404. Does this error result in overstatement or understatement of total assets? Complete this question by entering your answers in the tabs below. Req 4 Income Req 4 Balance Statement Sheet Req 5 Prepare an income statement. BERGO BAY COMPANY Income Statement For Year Ended December 31 $ 207,100 Sales Cost of goods sold Gross profit 207,100 27,000 $ 180,100 < Req 4 Income Statement Req 4 Balance Sheet > Req 4 Income Req 4 Balance Statement Sheet Req 5 Prepare a balance sheet as of December 31. BERGO BAY COMPANY Balance Sheet As at December 31 Assets Inventories 0 Total assets $ 0 Liabilities Total liabilities 0 Equity Total equity 0 Total liabilities and equity $ 0