what is the correct answer for 3B and 4?
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's inventory balances were as follows: Raw materials Work in process Finished goods $ 23,500 $13,000 $31,500 The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 37,500 machine-hours and incur $159,375 in manufacturing overhead cost. The following transactions were recorded for the year: a. Raw materials were purchased on account: $230,000. b. Raw materials were requisitioned for use in production: $205,000 (85% direct and 15% indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $ 172,000 $ 30,000 $ 40,500 $ 86,000 d. Heat, power, and water costs were incurred in the factory: $48,750. e. Prepaid insurance expired during the year: $17,500 (80% relates to factory operations, and 20% relates to selling and administrative activities). f. Advertising costs were incurred, $57,500. g. Depreciation was recorded for the year: $69,000 (75% relates to factory operations, and 25% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 43,000 machine-hours for the year. 1. Goods that cost $525,500 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. j. Sales for the year totalled $769,800 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $517,500. No Transaction General Journal Debit Credit 1 a. Raw materials 230,000 Accounts payable 230,000 2 b. Work in process Manufacturing overhead Raw materials 174,250 30,750 205,000 3 C. Work in process Manufacturing overhead Sales commissions expense Administrative salaries expense Salaries and wages payable 172,000 30,000 40,500 86,000 328,500 4 d. 48,750 Manufacturing overhead Accounts payable 48,750 5 e Manufacturing overhead Insurance expense Prepaid insurance 14,000 3,500 17,500 6 f. 57,500 Advertising expense Accounts payable 57,500 7 g. Manufacturing overhead Depreciation expense Accumulated depreciation 51,750 17,250 69,000 8 h Work in process 182 750 2. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. Answer is complete and correct. Manufacturing Overhead Beg. Bal. Beg. Bal. Raw Materials 23,500 230,000 205,000 48,500 a. b. b. 182,750 h. End. Bal. C. d. 30,750 30,000 48,750 14,000 51,750 e. g. End. Bal. 7,500 Cost of Goods Sold Beg. Bal. Beg. Bal. b. j. Work in Process 13,000 174,250 525,500i. 172,000 182,750 16,500 517,500 517,500 c. End. Bal. h. End. Bal. Beg. Bal. Finished Goods 31,500 525,500 517,500 39,500 i. j. End. Bal. 3-a. Is manufacturing overhead underapplied or overapplied for the year? Overapplied overhead Underapplied overhead 3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Do not round intermediate calculations and round your final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) X Answer is not complete. No Event General Journal Debit Credit 1 7,500.00 Manufacturing overhead Cost of goods sold Finished goods 6,767.00 Work in process 4. Prepare an income statement for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.) X Answer is not complete. RAVSTEN COMPANY Income Statement For the Year Ended December 31 Sales 5 X Cost of goods sold Gross profit Selling and administrative expenses: (5) $
