Root's Exteriors produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Conversion costs are added evenly throughout the preparation process. The beginning WIP inventory is composed of $1,760 of wood costs and $378 of conversion costs. January data for the Preparation Department are as follows (in millions):

	Sheets			Costs
	Beginning work in process inventory (15%			Beginning work in process inventory	$2,138
	of the way through preparation process)	2,000	sheets	Costs added during January:
	Started production	4,000	sheets	Wood	3,280
	Completed and transferred out to			Adhesives	2,940
	Compression in January	3,000	sheets	Direct labor	1,020
	Ending work in process inventory (20%			Manufacturing overhead	2,742
	of the way through preparation process)	3,000	sheets	Total costs	$12,120

Requirements

1.	Fill-in the time line for the Preparation Department.
2.	Use the time line to help you compute the equivalent units using the FIFO method. (Hint LOADING...) (For entries with a 0 balance, make sure to enter "0" in the appropriate column.)
3.	Compute the total costs of the units (sheets)
	a. Completed and transferred out to the Compression Department
	b. In the Preparation Department's Ending work in process inventory.
4.	Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department.
5.	Post the journal entries to the Work in process inventorylong dashPreparation T-account. What is the ending balance?