The following Balance Sheet was taken from the records of Fairport Manufacturing Company at the beginning of Year 3. Balance Sheet as of January 1, Year 2 Assets Cash $ 20,000 Raw materials inventory 1,800 Work in process inventory 2,400 Finished goods inventory 4,200 Property, plant, and equipment 15,000 Accumulated depreciation 6,000 Total Assets $ 37,400 Stockholders' Equity Common stock 16,800 Retained earnings 20,600 Total Stockholders' Equity $ 37,400 Transactions for the Accounting Period Fairport purchased $11,400 of direct raw materials and $600 of indirect raw materials on account. The indirect materials are capitalized in the Production Supplies account. Materials requisitions showed that $10,800 of direct raw materials had been used for production during the period. The use of indirect materials is determined at the end of the year by physically counting the supplies on hand. By the end of the year, $10,500 of the accounts payable had been paid in cash. During the year, direct labor amounted to 950 hours recorded in the Wages Payable account at $21 per hour. By the end of the year, $18,000 of wages payable had been paid in cash. At the beginning of the year, the company expected overhead cost for the period to be $12,600 and 1,000 direct labor hours to be worked. Overhead is allocated based on direct labor hours, which, as indicated in Event 3, amounted to 950 for the year. Selling and administrative expenses for the year amounted to $1,800 paid in cash. Utilities and rent for production facilities amounted to $9,300 paid in cash. Depreciation on the plant and equipment used in production amounted to $3,000. There was $24,000 of goods completed during the year. There was $25,500 of finished goods inventory sold for $36,000 cash. A count of the production supplies revealed a balance of $178 on hand at the end of the year. Any over- or underapplied overhead is considered to be insignificant. Required a. Prepare T-accounts with the beginning balances shown in the preceding list and record all transactions for the year including closing entries in the T-accounts. b-1. Prepare a schedule of cost of goods manufactured and sold. b-2. Prepare an income statement. b-3. Prepare a balance sheet.