Drafts of the condensed income statement and balance sheet of Allofe Co. for the current year are shown below. Shortly after preparing these draft financial statements, Allofe discovered that an error had been made in the year-end adjustment process. Overhead of $2,500 had not been applied to the ending work in process.

REQUIRED
1. Identify all adjusting and closing entries that would be affected by this error and prepare the missing portions of the entries.
2. Prepare a revised condensed income statement for Allofe.
(In solving this problem, assume that corporate income tax is not affected by theerror.)

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Allofe Co. Condensed Income Statement For Year Ended December 31, 20- Net sales $501,570 360,312 $141,258 87,088 $ 54,170 Cost of goods sold Gross profit Operating expenses Net income Allofe Co. Condensed Balance Sheet December 31, 20-- Assets $ 93,014 177,441 $270,455 Current assets Property, plant and equipment (net) Total assets Liabilities Current liabilities $ 28,671 60,000 $ 88,671 Long-term liabilities Total liabilities Stockholders' Equity Paid-in capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 57,000 124,784 $181,784 $270,455