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Practice Problem 1 Journal Entries, T-Accounts, Disposition of Overhead, Income Statement Ar the beginning of the year, Polson Manufacturing Company had the following balances in its inventory accounts: Raw Materials $170,000 Work in Process 20,000 Finished Goods 45,000 Polson applies overhead on the basis of 150 percent of direct labor cost. During the year, Polson experienced transactions as described below. a. Direct materials purchased, $280,000. b. Direct materials issued, $300,000. c. Indirect materials issued, $82,000. d. Labor costs: Direct labor Direct labor $110,0 0 0 Indirect labor 60,000 Selling & 70,000 adm e. Factory insurance expired, $5,000. f. Advertising costs, $30,000. g. Factory rent, $24,000. h. Depreciation on office equipment, $10,000. i. Miscellaneous factory costs, $7,850. j. Utilities (70 percent factory, 30 percent office), $10,000. k. Sales totaled $983,000. Ending balances in the inventory accounts were: ???? Raw Materials Work in Process Finished Goods 20,000 REQUIRED 1. Prepare journal entries for the above transactions. 2. Post the journal entries relating to manufacturing costs to the appropriate T- accounts. Practice Problem 1 Journal Entries, T-Accounts, Disposition of Overhead, Income Statement Ar the beginning of the year, Polson Manufacturing Company had the following balances in its inventory accounts: Raw Materials $170,000 Work in Process 20,000 Finished Goods 45,000 Polson applies overhead on the basis of 150 percent of direct labor cost. During the year, Polson experienced transactions as described below. a. Direct materials purchased, $280,000. b. Direct materials issued, $300,000. c. Indirect materials issued, $82,000. d. Labor costs: Direct labor Direct labor $110,0 0 0 Indirect labor 60,000 Selling & 70,000 adm e. Factory insurance expired, $5,000. f. Advertising costs, $30,000. g. Factory rent, $24,000. h. Depreciation on office equipment, $10,000. i. Miscellaneous factory costs, $7,850. j. Utilities (70 percent factory, 30 percent office), $10,000. k. Sales totaled $983,000. Ending balances in the inventory accounts were: ???? Raw Materials Work in Process Finished Goods 20,000 REQUIRED 1. Prepare journal entries for the above transactions. 2. Post the journal entries relating to manufacturing costs to the appropriate T- accounts