The company uses a job-order costing system in which overhead is applied to jobs onthe basis of direct-labor cost. Its predetermined overhead rate is based on a cost formual that estimated $330,000 of manufacturing overhead for an estimated activity level of $200,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw Material $25,000 Work in process 10,000 Finished Goods 40,000 During the year, the following transactions were completed: a) Raw materials purchased for cash $275,000 b) Raw materials requisitioned for use in production, $280,000 (materials costing $220,000 were charged directly to jobs; the remaining materials were indirect). c) Costs for employee services were incurred as follows: Direct Labor $180,000 Indirect Labor 72,000 Sales commissions 63,000 Administrative salaries 90,000 d) Rent for the year was $18,000 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities). e) Utililty costs incurred, $57,000 f) Advertising costs incurred, $140,000 g) Depreciation recorded on equipment $100,000 ($88,000 of this amount was on equipment used in factory operations; the remaining $12,000 was on equipment used in selling and administrative activities; the building has been fully depreciated). h) Manufacturing overhead cost was applied to jobs, $_____?_____ i) Goods that had cost $675,000 to manufacture according to their job cost sheets were completed. j) The company sold 50,000 basketballs for the year. k) The total cost to manufacture these goods according to their job cost sheets was $700,000. These costs are all variable. Requirements 1. Prepare journal entries to record the transactions for the year. 2. Prepare T-accounts for inventories, Manufacturing Overhead and Cost of Goods Sold. (Don't forget beginning balances) 3. Is Manufacturing Overhead under or overapplied for the year? Prepare a journal entry to close any balance to Cost of Goods Sold. 4. Prepare an income statement for the year.