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Best Products Inc. Uses a job-order system in which overhead is applied to jobs on the basis od DIRECT LABOR COST.

At he beginning of the year the inventories are follows:

• Raw Material . $ 42,000
• Work in Process . 30,000
• Finished Goods 58,000

During the year, the following transactions were completed:

1. Raw material purchased on account, $ 190,000 (crdito)
2. Raw material requisitioned for use in production, $200,000 ( 80% direct, 20 % indirect )
3. Cost for employees services were incurred as follows: DIRECT LABOR $200,000; indirect labor $82,000 y Administrative salaries $90,000
4. Utilities expense incurred in production ( energy, wter , etc) $ 75,000.
5. Advertising expense incurred, $ 120,000
6. Prepaid insurance , $ 30,000 ( 90% production)
7. Depreciation on Assets, $ 190,000 ( 85% production )
8. Manufacturing Overhead se aplic a la produccin a razn de 200 % del costo de labor directo. ( hint: Direct labor cost x 200%)
9. Goods that had cost $720,000 to manufacturing were completed and transferred to Finished Goods inventory
10. Sales for the year totaled $1,200,000. Costo of Sales was $740,000.

REQUIRED:

1. Prepared journal entries to record the transactions
2. Prepare T ACCOUNTS ONLY FOR : Raw Material, Work in Process, Finished Goods, Manufacturing Overhead
3. Prepare the Income Statement for the year..

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