Use the ending balances from Problem 12-15B as the beginning balances for this problem. The transactions for the second year of operation (2019) are described here. (Assume that all transactions are cash transactions unless otherwise indicated.)
1. The company purchased $60,000 of direct raw materials and $9,000 of indirect materials. Indirect materials are capitalized in the Production Supplies account.
2. Materials costing $41,000 were issued to the processing department.
3. Labor cost was $89,500. Direct labor for the processing and packaging departments was $36,000 and $29,500, respectively. Indirect labor costs were $24,000. (Note: Assume that sufficient cash is available when periodic payments are made. These amounts represent summary data for the entire year and are not presented in exact order of collection and payment.)
4. The predetermined overhead rate was $0.80 per direct labor dollar.
5. Actual overhead costs other than indirect materials and indirect labor for the year were $20,000.
6. The processing department transferred $125,000 of inventory to the packaging department.
7. The packaging department transferred $175,000 of inventory to finished goods.
8. The company sold inventory costing $171,000 for $325,000.
9. Selling and administrative expenses amounted to $32,000.
10. At the end of the year, $2,500 of production supplies was on hand.
11. Assume that over- or under applied overhead is insignificant.
Required
a. Record the data in T-accounts.
b. Record the closing entry for over- or under applied manufacturing overhead, assuming that the amount is insignificant.
c. Close the revenue and expense accounts.
d. Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2019.