Harriman Company has two processing departments: assembly and finishing. A predetermined overhead rate of $10 per direct labor hour is used to assign overhead to production. The company experienced the following operating activity for August:

a. Issued materials to assembly, $24,000.

b. Incurred direct labor cost: assembly, 500 hours at $9.20 per hour; finishing, 400 hours at $8 per hour.

c. Applied overhead to production.

d. Transferred goods to finishing, $32,500.

e. Transferred goods to finished goods warehouse, $20,500.

f. Incurred actual overhead, $10,000.

Required:

1. Prepare the required journal entries for the preceding transactions.

2. Assuming assembly and finishing have no beginning work-in-process inventories determine the cost of each department’s ending work-in-process inventories.