Bergamo Bay's computer system generated the following trialbalance on December 31, 2017. The company’s manager knows somethingis wrong with the trial balance because it does not show anybalance for Work in Process Inventory but does show a balance forthe Factory Overhead account. In addition, the accrued factorypayroll (Factory Payroll Payable) has not been recorded.
| | Debit | | | Credit | |
| Cash | $ | 56,000 | | | | |
| Accounts receivable | | 35,000 | | | | |
| Raw materials inventory | | 22,500 | | | | |
| Work in process inventory | | 0 | | | | |
| Finished goods inventory | | 9,000 | | | | |
| Prepaid rent | | 3,000 | | | | |
| Accounts payable | | | | $ | 10,000 | |
| Notes payable | | | | | 13,000 | |
| Common stock | | | | | 30,000 | |
| Retained earnings | | | | | 77,000 | |
| Sales | | | | | 177,500 | |
| Cost of goods sold | | 110,000 | | | | |
| Factory overhead | | 28,000 | | | | |
| Operating expenses | | 44,000 | | | | |
| Totals | $ | 307,500 | | $ | 307,500 | |
|
After examining various files, the manager identifies the followingsix source documents that need to be processed to bring theaccounting records up to date.
|
| Materials requisition 21-3010: | | $ | 4,200 | direct materials to Job 402 |
| Materials requisition 21-3011: | | $ | 7,500 | direct materials to Job 404 |
| Materials requisition 21-3012: | | $ | 1,700 | indirect materials |
| Labor time ticket 6052: | | $ | 3,000 | direct labor to Job 402 |
| Labor time ticket 6053: | | $ | 10,000 | direct labor to Job 404 |
| Labor time ticket 6054: | | $ | 2,000 | indirect labor |
|
Jobs 402 and 404 are the only units in process at year-end. Thepredetermined overhead rate is 100% of direct labor cost
Prepare an income statement for 2017 and a balance sheet as ofDecember 31, 2017.
