Mountain Manufacturing Company produces custom stamped metal parts for a variety of customers in Western Canada. During January, the company had two jobs in process. Job A was an order for 1,200 stamped parts and was started in December. Job A had $12,000 of manufacturing costs already accumulated on January 1. Job B was an order for 1,000 stamped parts and was started in January. The company used a job-order costing system. Total manufacturing overhead for the year was estimated to be $576,000. Mountain Manufacturing uses direct labour-hours as the allocation base to establish its predetermined overhead rate. A total of 19,200 direct labour-hours are expected to be worked during the year. On January I, the start of the company's fiscal year, inventory account balances were as follows:

Raw Materials ............................... $15,000
Work in Progress........................... $12,000
Finished Goods.............................. $10,000

During the month of January, the following transactions were completed:

a. Raw materials were purchased for $30,000.

b. Raw materials were requisitioned for use in production in the amount of $35,000. Of this amount, $25,000 was related to manufacturing ($5,000 for Job A and $20,000 for Job B) and the rest were indirect materials.

c. In January, $32,000 of direct labour ($7,000 for Job A and $25,000 for Job B). In addition. $2,000 of indirect labour costs were incurred.

d. In January, the company incurred the following general factory costs: Utilities expense of $8,000, rent on factory equipment of $8,000, and insurance costs of $1, 900.

e. The company recognized &10,000 in depreciation on factory equipment. 

f. The company applied manufacturing overhead to Job A and Job B. A total of 350 direct labour hours were spent completing Job A and 1,250 direct labour-hours were recorded for Job B. 

g. Administrative salaries of $30,000 were paid in January.

h. Selling expenses totalled $6,000 in January.

i. Job A was completed in January. The completed cost of Job A according to the job cost sheet was $34,500. Job B remains in process at the end of January.

J. Sales of all 1,200 units in Job A were recorded on account in the amount of $48,300 in January.

Required:

1. Prepare journal entries to record the transactions for January.

2. Prepare T-accounts. Determine ending balances in the inventory accounts and in the Manufacturing Overhead account.

3. Prepare a schedule of cost of goods manufactured.

4. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. Determine the adjusted Cost of Goods Sold.

5. Prepare an income statement for the month of January.