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ed on account, $160,000. production, $144,000 (materials costing $121,000 were charged directly to es: $ 176,000 $ 213,900

ed on account, $160,000. production, $144,000 (materials costing $121,000 were charged directly to es: $ 176,000 $ 213,900

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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The company uses a job-order costing system that applies overhead to jobs based on direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. The beginning inventory balances were as follows: Raw materials Work in process Finished goods During the year, the following transactions were completed: a. Raw materials purchased on account, $160,000. b. Raw materials used in production, $144,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect). c. Cash paid to employees: Direct labor Indirect labor Sales commissions Administrative salaries d. Rent for the year was $18,700 ($13,300 related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $18,000. f. Advertising costs incurred, $13,000. g. Depreciation on equipment, $22,000 ($17,000 related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities). h. Manufacturing overhead cost applied to jobs, $_?__ i. Completed goods cost $226,000 to manufacture. j. Sales for the year (all paid in cash) totaled $510,000. The manufacturing cost of these goods was $220,000. Required: 1. Prepare journal entries to record the transactions for the year. 2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your ournal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). BA. Is Manufacturing Overhead underapplied or overapplied? B. Prepare a journal entry to close Manufacturing Overhead to Cost of Goods Sold. 1. Prepare an income statement. All of the information needed for the income statement is available in the journal entries and T- accounts you have prepared. Required 1 $ 10,400 $ 4,400 $ 8,700 Complete this question by entering your answers in the tabs below. < View transaction list Prepare a journal entry to close Manufacturing Overhead to Cost of Goods Sold. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet $ 176,000 $ 213,900 $ 22,000 $ 48,000 1 Required 2 Required 3A Required 3B Note: Enter debits before credits. Transaction a. Record the entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Record entry General Journal Required 4 Clear entry < Required 3A Debit Credit View general Journal Required 4 >
Transcribed Image Text:The company uses a job-order costing system that applies overhead to jobs based on direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. The beginning inventory balances were as follows: Raw materials Work in process Finished goods During the year, the following transactions were completed: a. Raw materials purchased on account, $160,000. b. Raw materials used in production, $144,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect). c. Cash paid to employees: Direct labor Indirect labor Sales commissions Administrative salaries d. Rent for the year was $18,700 ($13,300 related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $18,000. f. Advertising costs incurred, $13,000. g. Depreciation on equipment, $22,000 ($17,000 related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities). h. Manufacturing overhead cost applied to jobs, $_?__ i. Completed goods cost $226,000 to manufacture. j. Sales for the year (all paid in cash) totaled $510,000. The manufacturing cost of these goods was $220,000. Required: 1. Prepare journal entries to record the transactions for the year. 2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your ournal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). BA. Is Manufacturing Overhead underapplied or overapplied? B. Prepare a journal entry to close Manufacturing Overhead to Cost of Goods Sold. 1. Prepare an income statement. All of the information needed for the income statement is available in the journal entries and T- accounts you have prepared. Required 1 $ 10,400 $ 4,400 $ 8,700 Complete this question by entering your answers in the tabs below. < View transaction list Prepare a journal entry to close Manufacturing Overhead to Cost of Goods Sold. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Journal entry worksheet $ 176,000 $ 213,900 $ 22,000 $ 48,000 1 Required 2 Required 3A Required 3B Note: Enter debits before credits. Transaction a. Record the entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Record entry General Journal Required 4 Clear entry < Required 3A Debit Credit View general Journal Required 4 >
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