Sky Scooters manufactures motor scooters. The company has automated production, so it allocates manufacturing overhead based on machine hours. Sky expects to incur $240,000 of manufacturing overhead costs and to use 4,000 machine hours during 2016. At the end of 2015, Sky reported the following inventories: Materials inventory....................... $30,000 Work in process inventory ............ 27,000 Finished goods inventory............... 15,000 During January 2016, Skippy actually used 300 machine hours and recorded the following transactions: a) Purchased materials on account, $31,000 b) Used direct materials, $39,000 and used indirect materials, $3,000 c) Manufacturing wages incurred totaled $40,000, of which 80% was direct labor and 10% was indirect labor d) FICA 6.5%, SUIT 0.7% and FUIT 2.1% deducted employers liability. e) Incurred other manufacturing overhead, $13,000 on account f) Allocated manufacturing overhead for January 2016 g) Cost of completed motor scooters, $100,000 h) Sold scooters on account, $175,000; cost of scooters sold, $95,000 Required: 1) Compute Skys predetermined manufacturing overhead rate for 2016.2) Journalize the transactions in the general journal.3) Enter the beginning balances and then post the transactions to the following accounts: Materials inventory, Work in process inventory, finished goods inventory, Wages payable, manufacturing overhead, and Cost of goods sold. 4) Close the ending balance of manufacturing overhead. Post your entry to the T-accounts. 5) What are the ending balances in the three inventory accounts and in Cost of goods sold?