Problem 8-63 (Static) Prepare a Production Cost Report and Adjust Inventory Balances: Weighted- Average Method (LO 8-3, 4) The records of Tillman Corporation's initial and unaudited accounts show the following ending inventory balances, which must be adjusted to actual costs: Unaudited Units Costs Work-in-process inventory 48, 000 $ 242, 880 Finished goods inventory 15, 000 105, 300 As the auditor, you have learned the following information. Ending work-in-process inventory is 35 percent complete with respect to conversion costs. Materials are added at the beginning of the manufacturing process, and overhead is applied at the rate of 90 percent of the direct labor costs. There was no finished goods inventory at the start of the period. The following additional information is also available: Costs Units Direct Materials Direct Labor Beginning inventory (25% complete as to labor) 32, 000 $ 116, 640 $ 14, 240 Units started 118, 000 Current costs 436, 860 199, 600 Units completed and transferred to finished goods inventory 102, 000Req u ired: a. Prepare a production cost report for Tillman using the weightedaverage method. ti. Show thejournal entry required to correct the difference between the unaudited records and actual ending balances of Workin Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference. 1:. lfthe adjustment in requirement {b} is not made, will the company's income and inventories be overstated or understated? Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a production cost report for Tillman using the weighted-average method. (Hint: You will need to calculate equivalent units for three categories: materials, labor, and overhead.) Note: Round \"Cost per equivalent unit" to 2 decimal places. Production Cost Report-Weighted-Average Physical Units Total Costs Materials Labor Overhead Flow of Production Units Units to be accounted for: Beginning WIP inventory 32,000 Units started this period 118,000 Total units to be accounted for 150,000 Units accounted for: Units completed and transferred out: From beginning inventory 32,000 Started and completed currently 70,000 Total transferred out 102,000 102,000 102,000 102,000 Units in ending WIP inventory 48,000 48,000 16,800 16,800 Total units accounted for 150,000 150,000 118,800 118,800 Costs to be accounted for: Costs in beginning WIP inventory $ 143,898 118,640 $ 14,240 $ 12,818 Current period costs 816, 100 438,880 199,800 179,840 Total costs to be accounted for 959,793 553,500 $ 213,840 $ 192,456 Cost per equivalent unit: Materials 3.89 Labor $ 1.80 Overhead $ 1.62 Costs accounted for: Costs assigned to units transferred out: Materials F $ 378,380 $ 376,380 Labor 183,800 3 183,800 Overhead 185,240 185,240 Total costs of units transferred out 725,220 Costs assigned to ending WIP inventory: Materials 177,120 177,120 Labor 30,240 30,240 Overhead 27,216 27,218 Total ending WIP inventory 234.578 Total costs accounted for $ 959,798 $ 553,500 $ 213,840 $ 192,458Required A Required B Required C Show the journal entry required to correct the difference between the unaudited records and actual ending balances of Work-in- Process Inventory and Finished Goods Inventory. Debit or credit Cost of Goods Sold for any difference. Note: If no entry is required for a transactionfevent, select "No journal entry required\" in the first account field. View transaction st View journal entry worksheet Finished goods Cost ofgoods sold Cost of goods sold Work in process Required A Required B Required C If the adjustment in requirement {13} is not made, 1will the company's income and inventories be overstated or understated? Income would have been overstated Worl-c in process would have been overstated Finished goods would have been understated