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Bergamo Bay's computer system generated the following trial balance on December 31, 2017. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Payroll Payable) has not been recorded.

	Debit	Credit
Cash	$67,000
Accounts receivable	45,000
Raw materials inventory	27,500
Work in process inventory	0
Finished goods inventory	6,000
Prepaid rent	2,000
Accounts payable		$11,500
Notes payable		14,500
Common stock		20,000
Retained earnings		91,000
Sales		184,500
Cost of goods sold	102,000
Factory overhead	27,000
Operating expenses	45,000
Totals	$321,500	$321,500

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:	$4,700	direct materials to Job 402
Materials requisition 21-3011:	$7,200	direct materials to Job 404
Materials requisition 21-3012:	$2,100	indirect materials
Labor time ticket 6052:	$5,000	direct labor to Job 402
Labor time ticket 6053:	$8,000	direct labor to Job 404
Labor time ticket 6054:	$3,000	indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost

Part 1

1. Record direct materials cost for Jobs 402 and 404

2. Record Direct labor costs for Jobs 402 and 404

3. Record the entry to allocate overheads to Jobs 402 and 404 at 150% of direct labor costs aligned

4. Record entry to assign cost of indirect materials

5. Record entry to assign cost of indirect labor

Part 2

Determine the revised balance of the Factory Overhead account after making the entries in part 1 using T-accounts. Determine whether there is any under- or overapplied overhead for the year.

Part 3

Prepare a revised trial balance

	BERGAMO BAY COMPANY Trial Balance December 31, 2017 Debit Credit Cash Accounts receivable Raw materials inventory Work in process inventory Finished goods inventory Prepaid rent Accounts payable Factory wages payable Notes payable Common stock Retained earnings Sales Cost of goods sold Factory overhead Operating expenses Totals $0 $0

Part 4

Prepare an income statement for 2017 and a balance sheet as of December 31, 2017.

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