The Collins Corporation uses a job-order costing system and

applies manufacturing overhead cost to jobs on the basis of the

cost of materials used in production. At the beginning of the

most recent year, the following estimates were made as a basis

for computing the predetermined overhead rate for the year:

manufacturing overhead cost, $200,000; direct materials cost,

$160,000. The following transactions took place during the year

(all purchases and services were acquired on account):

a. Raw materials were purchased, $86,000.

b. Raw materials were requisitioned for use in production (all

direct materials), $98,000.

c. Utility costs were incurred in the factory, $15,000.

d. Salaries and wages were incurred as follows:

Direct labor

$175.000

Indirect labor

$70.000

Selling and administrative salaries $125,000

c. Maintenance costs incurred in the factory, $15,000.

f. Advertising costs incurred, $89,000.

g. Depreciation recorded for the year, $80,000 (80% relates to

factory assets and the remainder relates to selling, general, and

administrative assets).

h. Rental cost incurred on buildings, $70,000, (75% of the space

is occupied by the factory, and 25% is occupied by sales and

administration).

i. Miscellaneous selling, general, and administrative costs

incurred, $11,000.

j. Manufacturing overhead cost was applied to jobs as per

company policy.

k. Cost of goods manufactured for the year, $500,000.

1. Sales for the year totaled $1,000,000. These goods cost

$600,000 to produce.

Required:

1. Prepare journal entries for each of the above transactions. Assume that all transactions with external suppliers, employees,

and customers were conducted in cash.

2. Prepare an Income Statement in good format.