PART 1:

Bergamo Bay's computer system generated the following trial balance on December 31, 2019. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Wages Payable) has not been recorded.

		Debit			Credit
Cash	$	79,000
Accounts receivable		48,000
Raw materials inventory		29,000
Work in process inventory		0
Finished goods inventory		9,000
Prepaid rent		3,000
Accounts payable				$	11,300
Notes payable					14,300
Common stock					30,000
Retained earnings					93,000
Sales					217,400
Cost of goods sold		118,000
Factory overhead		26,000
Operating expenses		54,000
Totals	$	366,000		$	366,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:		$	4,400	direct materials to Job 402
Materials requisition 21-3011:		$	7,900	direct materials to Job 404
Materials requisition 21-3012:		$	1,900	indirect materials
Labor time ticket 6052:		$	7,000	direct labor to Job 402
Labor time ticket 6053:		$	13,000	direct labor to Job 404
Labor time ticket 6054:		$	5,000	indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 02-2A Part 1

1. Direct materials costs to Work in Process Inventory.
2. Direct labor costs to Work in Process Inventory.
3. Overhead costs to Work in Process Inventory.
4. Indirect materials costs to the Factory Overhead account.
5. Indirect labor costs to the Factory Overhead account.

Required: 1. Prepare journal entries to assign the above costs.

PART 2:

Bergamo Bay's computer system generated the following trial balance on December 31, 2019. The companys manager knows something is wrong with the trial balance because it does not show any balance for Work in Process Inventory but does show a balance for the Factory Overhead account. In addition, the accrued factory payroll (Factory Wages Payable) has not been recorded.

		Debit			Credit
Cash	$	79,000
Accounts receivable		48,000
Raw materials inventory		29,000
Work in process inventory		0
Finished goods inventory		9,000
Prepaid rent		3,000
Accounts payable				$	11,300
Notes payable					14,300
Common stock					30,000
Retained earnings					93,000
Sales					217,400
Cost of goods sold		118,000
Factory overhead		26,000
Operating expenses		54,000
Totals	$	366,000		$	366,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:		$	4,400	direct materials to Job 402
Materials requisition 21-3011:		$	7,900	direct materials to Job 404
Materials requisition 21-3012:		$	1,900	indirect materials
Labor time ticket 6052:		$	7,000	direct labor to Job 402
Labor time ticket 6053:		$	13,000	direct labor to Job 404
Labor time ticket 6054:		$	5,000	indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 150% of direct labor cost.

Problem 02-2A Part 2

2-a. Post any entries from part 1 related to factory overhead to the T-account below to determine the amount of under- or overapplied overhead for the year. Determine whether there is any under- or overapplied overhead for the year. 2-b. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material.

2- c. Post a Revised Trial Balance

d. Prepare an income statement for 2019 and a balance sheet as of December 31, 2019.