Please answer question #3 and explain with the information provided below.

Problem GRP1 Basic Cost System: Journal Entries: Financial Statements ABC Manufacturing Co. The post-closing trial balance of ABC Manufacturing Co. at September 30 is reproduced as follows. ABC Star Manufacturing Co. Post-Closing Trial Balance September 30, 2011 Cash 14,000 Accounts Receivable 17,000 Finished Goods 24,000 Work in Process 4,000 Materials Building 156,000 Accumulated Depreciation--Building Factory Equipment 108,000 Accumulated Depreciation-Factory Equipment.... Office Equipment 12,000 Accumulated Depreciation-Office Equipment Accounts Payable Capital Stock 172,000 Retained Earnings Total $343.000 $343.000 During the month of October, the following transactions took place: a. Raw materials at a cost of $60,000 and general factory supplies costing $8,000 were purchased on account. (Materials and supplies are recorded in the materials account.) b. Raw materials to be used in production costing $41,000 and miscellaneous factory supplies costing $5.500 were issued. c. Wages and salaries incurred and paid for the month were as follows: factory wages (including $2,500 indirect labor), $34,000, and selling and administrative salaries, $5,000. (lgnore payroll withholdings and deductions.) d. Distributed the payroll in (c). e. Depreciation was recorded for the month at an annual rate of 5% on the building and on the equipment and office of the The and administrative staff uses approximately one-fifth