Wood Inc. is engaged in the manufacturing of furniture to customer order. The company uses job order costing. Overhead in the plant is charged based on the direct labor cost. The companys predetermined overhead rate for the year is based on the cost formula that estimated $120,000 in manufacturing overhead for an estimated allocation base of $100,000 direct labor dollars. The following transactions were recorded during the year: As on January 1, 2019 the inventory account balances were as follows;

Raw Materials	$8,000
Work in Process	$6,000
Finished Goods	$5,000

1. Raw materials, such as wood, paints, polishing items etc., were purchased on account, $90,000.
2. Raw materials were issued to production, $80,000; $10,000 of this amount was for indirect materials.
3. Labor costs incurred and paid $150,000, in what direct labor is $130,000 and indirect labor, $10,000; and selling and administrative salaries, $10,000.
4. Plant utilities costs incurred, $10,000.
5. Depreciation recorded for the year, $30,000 ($5,000 on selling and administrative assets; $25,000 on machineries in the plant).
6. Prepaid insurance expired, $4,800 ($4,000 plant, and $800 related to selling and administrative activities).
7. Shipping expenses incurred, $40,000.
8. Other manufacturing overhead costs incurred, $37,000 (credit Accounts Payable).
9. Manufacturing overhead was applied to production. Overhead is applied on the basis of direct labor cost. Due to greater than expected demand for its products, the company worked 110,000 machine-hours on all jobs during the year.
10. Furniture that cost $310,000 according to their job cost sheets were manufactured.
11. Sales for the year totaled $750,000 and were all on account. The total cost of furniture was $200,000 according to their job cost sheets.

    You are required to

12. Prepare journal entries to record the transaction above.
13. Prepare necessary ledger accounts
14. Calculate manufacturing cost is under applied or over applied. Prepare journal entry to adjust the under applied or over applied overhead.
15. Prepare an income statement for the year.