Question

Problem 3A-4 (Algo) Transaction Analysis (LO3-5] Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows: $ 40,950 Morrison Company Balance Sheet January 1 Assets Cash Raw materials Work in process Finished goods Prepaid expenses Property, plant, and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Retained earnings Total liabilities and stockholders' equity $15,500 4,350 19,350 39,200 3,050 160,000 $ 243,200 $ 11,000 232,200 $ 243,200

Answer 1

1. For m, Overhead is Under-applied

	Cash	Raw materials	Work in Process	Finished Goods	Manufacturing Overhead	Prepaid Expenses	PP&E (net)	Accounts Payable	Retained Earnings
Beg Bal	$           40,950	$           15,500	$              4,350	$           19,350	$                    -	$              3,050	$         160,000	$           11,000	$         232,200
a		$           82,600						$           82,600
b		$          (91,300)	$           78,200		$           13,100
c	$        (195,000)		$         104,400		$           44,250				$          (46,350)
d					$           34,650			$           34,650
e					$           54,600		$          (78,000)		$          (23,400)
f	$          (36,350)								$          (36,350)
g					$              1,520	$            (1,900)			$               (380)
h			$         144,400		$        (144,400)
i			$        (296,600)	$         296,600
j	$         405,080								$         405,080
k				$        (292,200)					$        (292,200)
l	$          (81,600)							$          (81,600)
m					$            (3,720)				$            (3,720)
Ending Bal	$         133,080	$             6,800	$           34,750	$           23,750	$                    -	$             1,150	$           82,000	$           46,650	$         234,880

2. Net Operating Income = $2680

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