The following information applies to the Johnson Tools Company for the year.
 

Factory Rent	$330,000
Direct Materials Inventory, Beginning	96,000
Direct Materials Inventory, Ending	87,000
Direct Materials Purchases	654,000
Direct Labor-Wages	425,000
Indirect Labor-Wages	28,000
Finished Goods Inventory, Beginning	25,000
Finished Goods Inventory, Ending	44,000
Indirect Materials	66,000
Plant Utilities	40,000
General and Administrative	101,350
Work-in-Process Inventory, Beginning	27,000
Work-in-Process Inventory, Ending	33,000
Marketing Expenses	225,000
Sales Revenue	2,550.000

Required:

Prepare a statement of cost of goods manufactured and an income statement for the year.  

 

Q2 Warren Company uses a predetermined overhead rate. Overhead for the next twelve months is estimated to be $480,000. Jackson applies overhead as a percentage of direct labor cost. Direct labor costs are estimated to be $400,000 for the next year. During the year actual direct labor costs amounted to $520,000 and the actual overhead was $605,000.

Required:

(1) Calculate the over/under-applied overhead for the year.
(2) Prepare the journal entries to close the accounts, assuming that the over/under-applied overhead is closed to cost of goods sold.