Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows:

During January the company completed the following transactions:
a. Purchased raw materials on account, $74,000.
b. Raw materials used in production, $77,000 ($67,000 was direct materials and $10,000 was indirect materials).
c. Paid $167,000 of salaries and wages in cash ($95,000 was direct labor, $35,000 was indirect labor, and $37,000 was related to employees responsible for selling and administration).
d. Various manufacturing overhead costs incurred (on account) to support production, $33,000.
e. Depreciation recorded on property, plant, and equipment, $90,000 (70% related to manufacturing equipment and 30% related to assets that support selling and administration).
f. Various selling expenses paid in cash, $27,000.
g. Prepaid insurance expired during the month, $1,200 (80% related to production, and 20% related to selling and administration).
h. Manufacturing overhead applied to production, $132,000.
i. Cost of goods manufactured, $288,000.
j. Cash sales to customers, $395,000.
k. Cost of goods sold (unadjusted), $285,000.
l. Cash payments to creditors, $62,000.
m. Under applied or over applied overhead $ ___?___ .
Required:
1. Calculate the ending balances that would be reported on the company's balance sheet on January 31. You can derive your answers using Microsoft Excel and Exhibit 3A-2 as your guide, or you can use paper, pencil, and a calculator.
Exhibit 3A-2: Sapphire Company: Completed Transaction Analysis

2. What is Morrison Company's net operating income for the month of January?

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Morrison Company Balance Sheet January 1 $ 32,000 $ 9,000 4,000 17,000 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 30,000 2,000 190,000 $254.000 $ 7.000 247,000 $254.000 Sapphire Company Transaction Analysis For the Month Ended January 31 Accounts Retained Cash Materials Pocess Goods Overhead Expenses PP&E (net)Payable Eornings 3,000 $240,000 4,000 $280,000 Raw Work in Finished Manufacturing Prepaid 5 Transoctions 6 Beginning balances 1/1 7 (a) Raw material purchases 8 (b) Raw materials used in production 9 c) Salaries and wages 10 (d) Utility costs 11 (e) Depreciation 12 (f) Advertising 13 (8) Expiration of prepaid insurance 14 (h) Manufacturing overhead applied $ 15,000 8,000 5,000 13,000 80,000 (78,000) 70,000 80,000 8,000 45,000 15,000 28,000 (135,000) 68,000 (22,000) 15,000 40,000) (12,000) (18,000) (200) (18,000) 800 1,000) (102,500) 10anufactured 102,500 (235,000 235,000 16 i Sales 17 (k) Cost of goods sold 18 Payments to creditors 19 (m) Overapplied overhead 20 Ending ballances 1/31 21 320,000 320,000 (245,000) 5,700 2,000 $200,000$ 7,000 $308,500 245,000) (92,000) (92,000) S 90,000 10,000 10500$ 3,000S