Morrison Company uses a job-order costing system to assignmanufacturing costs to jobs. Its balance sheet on January 1 is asfollows:

Morrison Company
Balance Sheet
January 1
Assets
Cash				$	40,500
Raw materials	$	15,100
Work in process		6,300
Finished goods		22,650			44,050
Prepaid expenses					3,200
Property, plant, and equipment (net)					140,000
Total assets				$	227,750
Liabilities and Stockholders’ Equity
Accounts payable				$	12,100
Retained earnings					215,650
Total liabilities and stockholders’ equity				$	227,750

During January the company completed the followingtransactions:

1. Purchased raw materials on account, $92,400.
2. Raw materials used in production, $99,000 ($81,200 was directmaterials and $17,800 was indirect materials).
3. Paid $196,950 of salaries and wages in cash ($112,200 wasdirect labor, $39,150 was indirect labor, and $45,600 was relatedto employees responsible for selling and administration).
4. Various manufacturing overhead costs incurred (on account) tosupport production, $40,200.
5. Depreciation recorded on property, plant, and equipment,$70,000 (70% related to manufacturing equipment and 30% related toassets that support selling and administration).
6. Various selling expenses paid in cash, $35,600.
7. Prepaid insurance expired during the month, $2,000 (80% relatedto production, and 20% related to selling and administration).
8. Manufacturing overhead applied to production, $139,200.
9. Cost of goods manufactured, $303,000.
10. Cash sales to customers, $413,760.
11. Cost of goods sold (unadjusted), $298,400.
12. Cash payments to creditors, $62,400.
13. Underapplied or overapplied overhead ?$?? .

Required:

1. Calculate the ending balances that would be reported on thecompany's balance sheet on January 31^st. (Hint: Be sureto calculate the underapplied or overapplied overhead and thenaccount for its affect on the balance sheet.)

2. What is Morrison Company’s net operating income for the monthof January?