Overview of general ledger relationships. The Blakely Company is a small machine shop that uses normal costing in its job-costing system. The total debits and credits in certain accounts one day before year-end are as follows:

All materials purchased are direct materials. Note that “total debits” in the inventory accounts would include beginning inventory balances on January 1, 2008, if any.

The total debits and total credits above do not include the following:

a. The manufacturing labor costs for the December31 working day: direct manufacturing labor, $5,000, and indirect manufacturing labor, $1,000.

b. Miscellaneous manufacturing overhead incurred on December 31:$1,000.

Additional Information:

a. Manufacturing overhead has been allocated as a percentage of direct manufacturing labor costs through December 30.

b. Direct materials purchased during 2008 were $85,000.

c. No direct materials were returned to suppliers.

d. Direct manufacturing labor costs during 2008 totaled $150,000, not including the December31 working day described previously.

1. Use I-accounts to compute the January 1, 2008 beginning balances for the Materials Control, Work-in-Process Control, and Finished Goods Control accounts.

2. Prepare all adjusting and closing journal entries for the preceding accounts. Assume that all under- or overallocated manufacturing overhead is closed directly to Cost of Goods Sold.

3. Compute the ending inventory balances on December 31, 2008, after adjustments and closing, for Materials Control, Work-in-Process Control, and Finished Goods Control accounts.

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December 30, 2008 Total Credits $ 70,000 305,000 Total Debits Materials Control Work-in-Process Control Manufacturing Department Overhead Control Finished Goods Control Cost of Goods Sold Manufacturing Overhead Allocated $100,000 320,000 85,000 325,000 300,000 300,000 90,000