Smart Phones are Dumb Inc. (here forward known as SPADI), led by their CEO, Harvey Hodge (here forward known as Harv) is a manufacturer of smart phones for home use. SPADI is based out of Rockland County and uses a job order costing system.

Inventory balances at 1/1/21 were as follows:

Raw materials $ 80,000

Work in process $ 60,000

Finished goods $ 30,000

The company applies overhead using a predetermined overhead rate based on machine hours. At the beginning of the year, they estimated that it works 30,000 machine hours and incur $ 360,000 in manufacturing overhead. The following transactions were recorded for 2021.

1. Raw Materials purchased $ 180,000
2. Raw Materials were requisitioned into production in the amount of $200,000, 90% of this was direct materials, the other 10% were for indirect supplies
3. The following employee costs were incurred during 2021, labor in the assembly plant $ 240,000, factory janitor $ 35,000, administrative salaries $95,000.
4. Advertising sales expense incurred $ 15,000
5. Factory utilities $ 25,000
6. Fire insurance on Factory for policy period 7/1/21 thru 6/30/22 = $120,000
7. Depreciation for the year, using the straight -line basis was $ 200,000 for the factory and $ 80,000 for office equipment
8. Manufacturing overhead was applied to jobs. SPADI actual machine hour activity for 2021 turned out to be 30,500 hours.
9. Goods completed and transferred to finished goods were $ 700,000
10. Phones were sold for $ 875,000 that per the job costs sheets cost 640,000
11. Close out misapplied overhead (if any) as applicable to COGS
12. SPADI collected all its sales, paid off all salaries payable and paid off $300,000 of accounts payable

Prepare appropriate journal entries for a thru l above; assume transactions a thru k are recorded on account. Post activity to T accounts. Prepare income statement in good form period ended 12.31.21.