On October 1, the accountant of Columbus Company prepared a trial balance from which the following accounts were extracted:

The following transactions and other data have been made available for October:
(a) Purchased materials and supplies costing $24,800.
(b) Paid factory overhead of $20,100.
(c) Paid marketing expenses of $25,050.
(d) Paid administrative expenses of $ 19,700.
(e) Requisitions for direct materials were $29,800 and indirect materials were $3,950.
(f) Annual depreciation for building was 5% (75% to manufacturing, 15% to marketing, and 10% to administrative expenses); for machinery and equipment, 10%; and for office equipment, 15% (40% to marketing and 60% to administrative expenses).
(g) Sales (20,700 units) totaled $144,900.
(h) Sales returns and allowances totaled $1,300.
(i) Cash payments for accounts payable were $75,000 and for payroll were $21,800.
(j) Distribution of payroll earned was $18,600 for direct labor and $4,400 for indirect labor.
(k) Cash collected from customers totaled $116,900.
(1) Applied factory overhead based on machine hours used was $27,450.
(m) 20,400 units were transferred to finished goods.
(n) Cost of goods sold is calculated on the fifo basis.
(o) Work in process inventory on October 31 totaled $4,440.
Required:
(1) Prepare in detail the cost of goods sold section of the income statement for October, assuming that over- or under applied factory overhead is deferred until the end of the calendar year.
(2) Prepare the income statement for October.
(3) Calculate the amount of over- or under applied factory overhead for October.

Transcribed Image Text:

Dr. Cr. 4,070 40,700 48,000 Work in Process (1,200 units) Materials and Supplies Buildings Accumulated Depreciation-Buildings. Machinery and Equipment96,000 Accumulated Depreciation- Machinery and Equipment. Office Equipment... Accumulated Depreciation-Office Equipment.. Accrued Payrol $6,000 37,500 1,000 3,200 650