Vaden Company is a manufacturing firm that uses job-order costing. At the beginning of

the year, the companys inventory balances were as follows:

Raw materials

$39,000

Work in process

$49,000

Finished goods

$10,000

The company applies overhead to jobs using a predetermined overhead rate based on

machine-hours. At the beginning of the year, the company estimated that it would work

22,000 machine-hours and incur $264,000 in manufacturing overhead cost. The

following transactions were recorded for the year:

i.

Raw materials were purchased, $301,000.

ii.

Raw materials were requisitioned for use in production, $292,000 ($273,000

direct and $19,000 indirect).

iii.

The following employee costs were incurred: direct labor - $296,000; indirect

labor - $81,000; and administrative salaries, $181,000.

iv.

Selling costs, $130,000.

v.

Factory utility costs, $18,000.

vi.

Depreciation for the year was $162,000 of which $155,000 is related to

factory operations and $7,000 is related to selling and administrative

activities.

vii.

Manufacturing overhead was applied to jobs. The actual level of activity for

the year was 21,000 machine-hours.

viii.

Goods totaling $839,000 were transferred to finished goods.

ix.

Sales for the year totaled $1,200,000 and the costs on the job cost sheets of the

goods that were sold totaled $824,000.

x.

The balance in the Manufacturing Overhead account was closed out to Cost of

Goods Sold.

Required (15 points):

a. Prepare the appropriate journal entries for each of the above items.

b. Show in T-accounts the year-end balances for each of the inventory accounts, the cost

of goods sold and manufacturing overhead.