Requirements 1. Prepare journal entries to record the transactions for 2020 including an entry to close out under- or overallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. 2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account. Data tableCosts incurred:Purchases of direct materials (net) on creditDirect manufacturing labor costIndirect laborDepreciation, factory equipmentDepreciation, office equipmentMaintenance, factory equipmentMiscellaneous factory overheadRent, factory buildingAdvertising expenseSales commissionsInventories:Direct materialsWork in processFinished goodsSJanuary 1, 20209,700 $6,30066,000$ 125,00081,00054,20038,0007,40029,0009,50078,00097,00034,000December 31, 202013,00028,00025,000 Construction Company produces gadgets for the coveted small appliance market. The following data reflectactivity for the year 2020:(Click the icon to view the data.)Construction Co. uses a normal-costing system and allocates overhead to work in process at a rate of $2.70per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account forindirect materials.Read the requirements.Requirement 1. Prepare journal entries to record the transactions for 2020 including an entry to close outunder- or overallocated overhead to cost of goods sold. For each journal entry indicate the source documentthat would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced asbackup for the entry. (Record debits first, then credits. Exclude explanations from any journal entries.)Record the purchase of direct materials, $125,000.(1.)Journal EntryAccountsDebitCredit

1. Record the purchase of Direct materials: No. Account Title Debit…

Answered: Construction Company produces gadgets…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Requirements 1. Prepare journal entries to record the transactions for 2020 including an entry to close out under- or overallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. 2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.

Data table
Costs incurred:
Purchases of direct materials (net) on credit
Direct manufacturing labor cost
Indirect labor
Depreciation, factory equipment
Depreciation, office equipment
Maintenance, factory equipment
Miscellaneous factory overhead
Rent, factory building
Advertising expense
Sales commissions
Inventories:
Direct materials
Work in process
Finished goods
S
January 1, 2020
9,700 $
6,300
66,000
$ 125,000
81,000
54,200
38,000
7,400
29,000
9,500
78,000
97,000
34,000
December 31, 2020
13,000
28,000
25,000

Construction Company produces gadgets for the coveted small appliance market. The following data reflect
activity for the year 2020:
(Click the icon to view the data.)
Construction Co. uses a normal-costing system and allocates overhead to work in process at a rate of $2.70
per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for
indirect materials.
Read the requirements.
Requirement 1. Prepare journal entries to record the transactions for 2020 including an entry to close out
under- or overallocated overhead to cost of goods sold. For each journal entry indicate the source document
that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as
backup for the entry. (Record debits first, then credits. Exclude explanations from any journal entries.)
Record the purchase of direct materials, $125,000.
(1.)
Journal Entry
Accounts
Debit
Credit

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