On January 1, the general ledger of JACKSON COMPANY contained the following accounts and balances:

$
Cash 47,000
Accounts Receivable 50,000
Finished Goods 32,500
Work in Process 7,500
Materials 21,500
Machinery 45,300
Accumulated Depreciation – Machinery 10,000
Accounts Payable 58,875
Common Stock 100,000
Retained Earnings 34,925

Details of inventories are:

Finished goods inventory: $32,500

Job 101 Job 102

Work in Process Inventory:
Direct Materials: 500 units of A @ $5 $2,500
200 units of B @ $3 $600
Direct Labor: 500 hours @ $4 2,000
200 hours @ $5 1,000
Factory overhead applied at the rate
of $2 per direct labor hour 1,000_ 400__
Total $5,500 $2,000

Materials Inventory: $21,500

During January, the following transactions were completed:

a. Materials were purchased on account for $115,020.
b. Payroll totaling $110,000 was accrued.
c. Payroll was distributed as follows: Job101, 2,500 direct labor hours @8; Job 102, 4,000 direct labor hours @10; Job 103 ,
3,000 direct labor hours @6; indirect labor, 12,000; marketing and administrative salaries, $20,000.
d. Materials were issued as follows: $51,600 to Job 101; $42,000 to Job 102; $14,575 to Job 103. Indirect materials costing
$7,520 were issued.
e. Factory overhead was applied to Jobs 101, 102, and 103 at a rate of $4.50 per direct labor hour.
f. Jobs 101 and 102 were completed and immediately sold on account for $120,000 and $135,000, respectively.
g. After allowing a 5% cash discount, a net amount of $247,000 was collected on accounts receivable.
h. Marketing and administrative expenses (other than salaries) paid during the month amounted to $15,000. Miscellaneous
factory overhead of $22,680 was paid in cash. Depreciation on factory machinery was $2,000.
i. Payments on account, other than payrolls paid, amounted to $85,000.
j. Applied Factory Overhead is closed to Factory Overhead Control. The overapplied or underapplied overhead is then closed to
Cost of Goods Sold.

Required:
1. Prepare a trial balance of the general ledger as of January 31; Work in process must reconcile to its subsidiary ledger.
2. Prepare a cost of goods sold statement for January.
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