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Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's Inventory balances were as follows: Raw materials Work in process Finished goods The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,000 machine-hours and incur $159,840 in manufacturing overhead cost. The following transactions were recorded for the year: $17,900 $ 11,900 $33,800 a. Raw materials were purchased on account: $209,500. b. Raw materials were requisitioned for use in production: $199,500 (80% direct and 20% Indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $169,500 $ 28,900 $ 37,900 $ 83,800 d. Heat, power, and water costs were incurred in the factory: $43,900. e. Prepaid insurance expired during the year: $11,900 (90% relates to factory operations, and 10% relates to selling and administrative activities). f. Advertising costs were incurred, $51,900. g. Depreciation was recorded for the year: $61,900 (85% relates to factory operations, and 15% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 40,000 machine-hours for the year. 1. Goods that cost $502,800 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. J. Sales for the year totalled $766,500 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $494,000.

Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's Inventory balances were as follows: Raw materials Work in process Finished goods The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,000 machine-hours and incur $159,840 in manufacturing overhead cost. The following transactions were recorded for the year: $17,900 $ 11,900 $33,800 a. Raw materials were purchased on account: $209,500. b. Raw materials were requisitioned for use in production: $199,500 (80% direct and 20% Indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $169,500 $ 28,900 $ 37,900 $ 83,800 d. Heat, power, and water costs were incurred in the factory: $43,900. e. Prepaid insurance expired during the year: $11,900 (90% relates to factory operations, and 10% relates to selling and administrative activities). f. Advertising costs were incurred, $51,900. g. Depreciation was recorded for the year: $61,900 (85% relates to factory operations, and 15% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 40,000 machine-hours for the year. 1. Goods that cost $502,800 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. J. Sales for the year totalled $766,500 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $494,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Prepare journal entries to record the transactions given above. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 

 

 

2. Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account.

 

 

3. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Round your percentages and final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

 

 

 

4. Prepare an income statement for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.)

 

 
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's Inventory balances were as follows: Raw materials Work in process Finished goods The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,000 machine-hours and incur $159,840 in manufacturing overhead cost. The following transactions were recorded for the year: $17,900 $ 11,900 $33,800 a. Raw materials were purchased on account: $209,500. b. Raw materials were requisitioned for use in production: $199,500 (80% direct and 20% indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $169,500 $ 28,900 $ 37,900 $ 83,800 d. Heat, power, and water costs were incurred in the factory: $43,900. e. Prepaid insurance expired during the year: $11,900 (90% relates to factory operations, and 10% relates to selling and administrative activities). f. Advertising costs were incurred, $51,900. g. Depreciation was recorded for the year: $61,900 (85% relates to factory operations, and 15% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 40,000 machine-hours for the year. 1. Goods that cost $502,800 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. J. Sales for the year totalled $766,500 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $494,000.
Transcribed Image Text:Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year, the company's Inventory balances were as follows: Raw materials Work in process Finished goods The company applies overhead cost to jobs on the basis of machine-hours. For the current year, the company estimated that it would work 36,000 machine-hours and incur $159,840 in manufacturing overhead cost. The following transactions were recorded for the year: $17,900 $ 11,900 $33,800 a. Raw materials were purchased on account: $209,500. b. Raw materials were requisitioned for use in production: $199,500 (80% direct and 20% indirect). c. The following costs were incurred for employee services: Direct labour Indirect labour Sales commissions Administrative salaries $169,500 $ 28,900 $ 37,900 $ 83,800 d. Heat, power, and water costs were incurred in the factory: $43,900. e. Prepaid insurance expired during the year: $11,900 (90% relates to factory operations, and 10% relates to selling and administrative activities). f. Advertising costs were incurred, $51,900. g. Depreciation was recorded for the year: $61,900 (85% relates to factory operations, and 15% relates to selling and administrative activities). h. Manufacturing overhead cost was applied to production. The company recorded 40,000 machine-hours for the year. 1. Goods that cost $502,800 to manufacture according to their job cost sheets were transferred to the finished goods warehouse. J. Sales for the year totalled $766,500 and were all on account. The total cost to manufacture these goods according to their job cost sheets was $494,000.
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3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Round your percentages and final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet A Record the entry to properly dispose of any balance in the Manufacturing Overhead account. Note: Enter debits before credits. Event 1 Manufacturing overhead Cost of goods sold Finished goods Work in process Record entry General Journal Sales Cost of goods sold Gross profit Selling and administrative expenses: Sales commissions Clear entry RAVSTEN COMPANY Income Statement For the Year Ended December 31 Advertising expenses Administrative salaries Insurance expense Depreciation expense Operating income 4. Prepare an income statement for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.) $ (37,900) (51,900) Debit 1,575.00 (83,800) (1,190) (9,285) $ 766,500 766,500 Credit (184,075) $ 582,425 View general journal
Transcribed Image Text:3-b. Prepare a journal entry to properly dispose of any balance in the Manufacturing Overhead account. (Round your percentages and final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet A Record the entry to properly dispose of any balance in the Manufacturing Overhead account. Note: Enter debits before credits. Event 1 Manufacturing overhead Cost of goods sold Finished goods Work in process Record entry General Journal Sales Cost of goods sold Gross profit Selling and administrative expenses: Sales commissions Clear entry RAVSTEN COMPANY Income Statement For the Year Ended December 31 Advertising expenses Administrative salaries Insurance expense Depreciation expense Operating income 4. Prepare an income statement for the year. (Do not round intermediate calculations and round your final answers to nearest whole dollar amount.) $ (37,900) (51,900) Debit 1,575.00 (83,800) (1,190) (9,285) $ 766,500 766,500 Credit (184,075) $ 582,425 View general journal
1. Prepare journal entries to record the transactions given above. (Do not found intermediate calculations. In no entry is required for the first account field.) a transaction/event, select "No Journal entry required" N View transaction list IN N N 1 N IN No 1 2 3 5 6 7 8 10 11 Beg. Bal. a. End. Bal. Bog. Bal. 6. n. End. Bal. Beg. Bal. Transaction End. Bal. C d. 1. 9. h. L -1. J-2. View journal entry worksheet Raw materials 209,500 27,900 Accounts payable 177,600 15,800 Work in process Manufacturing overhead Raw materials Work in process Manufacturing overhead Sales commissions expense Administrative salaries expense Salaries and wages payable Manufacturing overhead Accounts payable Manufacturing overhead Insurance expense Prepaid insurance Advertising expense Accounts payable Manufacturing overhead Depreciation expense Accumulated depreciation Work process Manufacturing overhead Finished goods Work in process Accounts receivable Sales Cost of goods sold Finished goods Raw Materials 17,900 General Journal 199,500 b Work In Process 11,900 159,600 169,500 502,800 1. Finished Goodc 33,800 502,800 42,600 494,000 1 Bag. Bal b. 2 d. End. Bal. Bog. Bal. End. Bal. 39,900 28,900 Debit 43,900 10,710 52.615 209,500 159,600 39,900 494,000 494,000 169,500 28,900 37,900 83,800 43,900 10,710 1,190 2. Prepare T-accounts for Inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your Inventory accounts). Compute an ending balance in each account. 51,900 52,615 9,285 177,600 502,800 766,500 Manufacturing Overhead 494.000 177,600 h. 1,575 Cost of Goods Bold Credit 209,500 199,500 320,100 43,900 11,900 51,900 61,900 177,600 502,800 766,500 494,000 Ⓒ
Transcribed Image Text:1. Prepare journal entries to record the transactions given above. (Do not found intermediate calculations. In no entry is required for the first account field.) a transaction/event, select "No Journal entry required" N View transaction list IN N N 1 N IN No 1 2 3 5 6 7 8 10 11 Beg. Bal. a. End. Bal. Bog. Bal. 6. n. End. Bal. Beg. Bal. Transaction End. Bal. C d. 1. 9. h. L -1. J-2. View journal entry worksheet Raw materials 209,500 27,900 Accounts payable 177,600 15,800 Work in process Manufacturing overhead Raw materials Work in process Manufacturing overhead Sales commissions expense Administrative salaries expense Salaries and wages payable Manufacturing overhead Accounts payable Manufacturing overhead Insurance expense Prepaid insurance Advertising expense Accounts payable Manufacturing overhead Depreciation expense Accumulated depreciation Work process Manufacturing overhead Finished goods Work in process Accounts receivable Sales Cost of goods sold Finished goods Raw Materials 17,900 General Journal 199,500 b Work In Process 11,900 159,600 169,500 502,800 1. Finished Goodc 33,800 502,800 42,600 494,000 1 Bag. Bal b. 2 d. End. Bal. Bog. Bal. End. Bal. 39,900 28,900 Debit 43,900 10,710 52.615 209,500 159,600 39,900 494,000 494,000 169,500 28,900 37,900 83,800 43,900 10,710 1,190 2. Prepare T-accounts for Inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the opening balances in your Inventory accounts). Compute an ending balance in each account. 51,900 52,615 9,285 177,600 502,800 766,500 Manufacturing Overhead 494.000 177,600 h. 1,575 Cost of Goods Bold Credit 209,500 199,500 320,100 43,900 11,900 51,900 61,900 177,600 502,800 766,500 494,000 Ⓒ
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