Managerial Analysis BYP 2-2 In the course of routine checking of all journal entries prior to preparing year-end reports, Sally Yount discovered several strange entries. She recalled that the president's son Ken had come in to help out during an especially busy time and that he had recorded some journal entries. She was relieved that there were only a few of his entries, and even more relieved that he had included rather lengthy explanations.The entries Ken made were:
1. Work in Process Inventory 25,000 Cash 25,000(This is for materials put into process.
2. Manufacturing Overhead 12,000 Cash 12,000(This is for bonuses paid to salespeople.
3. Wages Expense 120,000 Cash 120,000(This is for the factory workers' wages.
4. Work in Process Inventory 3,000 Raw Materials Inventory 3,000(This is for the glue used in the factory.
1. How should Ken have recorded each of the four events?
2. If the entry was not corrected, which financial statements (income statement or balance sheet) would be affected? What balances would be overstated or understated?I only need help with part a - number 2- manufacturing overhead.