For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data.
Job Number Explanation Direct Materials Direct Labor Manufacturing Overhead Total Costs
7640 Balance 1/1 $25,000 $24,000 $28,800 $77,800
Current year's costs 30,000 36,000 43,200 109,200
7641 Balance 1/1 11,000 18,000 21,600 $50,600
Current year's costs 43,000 48,000 57,600 148,600
7642 Current year's costs 58,000 55,000 66,000 179,200
Other data:1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.3. Job No. 7640 and Job No. 7641 were completed during the year.4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.5. Manufacturing overhead incurred on account totaled $120,000.6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000.
Required:
a) Prove the agreement of the work-in-process Inventory with job cost sheets pertaining to unfinished work. Post each to the T-account in the following order: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs. b) Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold. c) Determine the gross profit to be reported for 2020.