Holmes & Watson Ltd specialises in home renovation and house flipping. It is currently August and their builders are working on two projects that were started mid-June, Job 41 and Job 42. The accumulated cost for Job 41 and Job 42 at the beginning of August are $25,000 and $260,000, respectively. At the beginning of August there is one completed and unsold project that cost $500,000. The following information is available:
•   The company started the period with $10,000 of raw materials on hand.
•   During August, the following overhead costs have been incurred:
   ◦   General selling and administrative expense: $10,000
   ◦   Depreciation: $1,500 (includes $600 for fixed assets used by selling and administrative functions and $900 for renovation equipment)
   ◦   Advertising expense: $1,000
   ◦   Property insurance related to the two jobs: $1,700
•   $35,000 worth of direct materials for appliances, flooring and paint were purchased on account, $20,000 of which was used for Job 41 and $15,000 for Job 42. The builders used other minor materials that cost a total of $900 on both jobs.
•   Employee time tickets recorded $8,000 for Job 41 and $12,000 for Job 42. The general contractor who manages and oversees both projects is currently owed $2,600.
•   Home renovation is a labour-intensive business and so an appropriate allocation base that reflects this should be used in allocating overhead. The annual manufacturing overhead cost is budgeted at $95,400, the estimated annual machine hours is 2,400 and the estimated annual direct labour hours is 7,200. Over the month, machines have worked for a total of 120 hours, and the employee time tickets reported 170 direct labour hours for Job 41 and 250 direct labour hours for Job 42.
•   Job 41 is completed during August and the client is billed for $73,000.
Required:
1. Prepare relevant journal entries for August.
2. Prepare the Schedule of Cost of Goods Manufactured for August.
3. Prepare the Schedule of Cost of Goods Sold for August.