The following Balance Sheet was taken from the records of Fanning Manufacturing Company at the beginning of Year 3. Balance Sheet as of January 1, Year 2 Assets Cash $ 9,460 Raw materials inventory 760 Work in process inventory Finished goods inventory 1,300 2,130 Property, plant, and equipment (net) 7,900 Total Assets $ 21,550 Stockholders' Equity Common stock Retained earnings Total Stockholders' Equity 7,900 10,050 $ 21,550 Transactions for the Accounting Period 1. Fanning purchased $6,500 of direct raw materials and $380 of indirect raw materials on account. The Indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $6,200 of direct raw materials had been used for production during the period. The use of Indirect materials is determined at the end of the year by physically counting the supplies on hand. 2. By the end of the year, $5,310 of the accounts payable had been paid in cash. 3. During the year, direct labor amounted to 960 hours recorded in the Wages Payable account at $10.30 per hour. 4. By the end of the year, $8,988 of wages payable had been paid in cash. 5. At the beginning of the year, the company expected overhead cost for the period to be $6,262 and 1,010 direct labor hours to be worked. Overhead is allocated based on direct labor hours, which, as indicated in Event 3, amounted to 960 for the year. 6. Selling and administrative expenses for the year amounted to $980 paid in cash. 7. Utilities and rent for production facilities amounted to $4,670 paid in cash. 8. Depreciation on the plant and equipment used in production amounted to $1,560. 9. There was $11,100 of goods completed during the year. 10. There was $12,300 of finished goods Inventory sold for $18,900 cash. 11. A count of the production supplies revealed a balance of $92 on hand at the end of the year. 12. Any over- or underapplied overhead is considered to be insignificant. Required a. Prepare T-accounts with the beginning balances shown in the preceding list and record all transactions for the year including closing entries in the T-accounts. b-1. Prepare a schedule of cost of goods manufactured and sold. b-2. Prepare an income statement. b-3. Prepare a balance sheet.