Edwin Parts, a job shop, recorded the following transactions in May: 1. Purchased $87,200 in materials on account. 2. Issued $3,650 in supplies from the materials Inventory to the production department. 3. Issued $43,600 Iin direct materials to the production department. 4. Paid for the materials purchased in transaction (1). 5. Incurred wage costs of $67,200, which were debited to Payroll, a temporary account. Of this amount, $22,300 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $44,900 was paid in cash to the employees. See transactions (6) and (7) for additional Information about Payroll. 6. Recognized $34,700 in fringe benefit costs, incurred as a result of the wages paid In (5). This $34,700 was debited to Payroll and credited to Fringe Benefits Payable. 7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, Indirect manufacturing labor, and 20 percent, administrative and marketing costs. 8. Applied overhead on the basis of 140 percent of direct labor costs. 9. Paid for utilities, power, equipment maintenance, and other miscellaneous Items for the manufacturing plant totaling $41,300. 10. Recognized depreciation of $26,300 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Edwin Parts are shown as follows. Beginning $ 89,900 25,400 102,600 Ending Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Prepare T-accounts to show the flow of costs during the period. ? $ 93,200 154,800
Edwin Parts, a job shop, recorded the following transactions in May: 1. Purchased $87,200 in materials on account. 2. Issued $3,650 in supplies from the materials Inventory to the production department. 3. Issued $43,600 Iin direct materials to the production department. 4. Paid for the materials purchased in transaction (1). 5. Incurred wage costs of $67,200, which were debited to Payroll, a temporary account. Of this amount, $22,300 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $44,900 was paid in cash to the employees. See transactions (6) and (7) for additional Information about Payroll. 6. Recognized $34,700 in fringe benefit costs, incurred as a result of the wages paid In (5). This $34,700 was debited to Payroll and credited to Fringe Benefits Payable. 7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, Indirect manufacturing labor, and 20 percent, administrative and marketing costs. 8. Applied overhead on the basis of 140 percent of direct labor costs. 9. Paid for utilities, power, equipment maintenance, and other miscellaneous Items for the manufacturing plant totaling $41,300. 10. Recognized depreciation of $26,300 on manufacturing property, plant, and equipment. Required: a. Prepare journal entries to record these transactions. b. The balances that appeared in the accounts of Edwin Parts are shown as follows. Beginning $ 89,900 25,400 102,600 Ending Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Prepare T-accounts to show the flow of costs during the period. ? $ 93,200 154,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Problem 7-65 (Static) Tracing Costs In a Job Company (LO 7-2, 3)
Edwin Parts, a job shop, recorded the following transactions in May:
1. Purchased $87,200 in materials on account.
2. Issued $3.650 in supplies from the materials Inventory to the production department.
3. Issued $43,600 in direct materials to the production department.
4. Paid for the materials purchased in transaction (1).
5. Incurred wage costs of $67,200, which were debited to Payroll, a temporary account. Of this amount, $22,300 was withheld for
payroll taxes and credited to Payroll Taxes Payable. The remaining $44,900 was paid in cash to the employees. See transactions (6)
and (7) for additional Information about Payroll.
6. Recognized $34,700 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,700 was debited to Payroll and
credited to Fringe Benefits Payable.
7. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, Indirect manufacturing labor, and
20 percent, administrative and marketing costs.
8. Applied overhead on the basis of 140 percent of direct labor costs.
9. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $41,300.
10. Recognized depreciation of $26,300 on manufacturing property, plant, and equipment.
Required:
a. Prepare journal entries to record these transactions.
b. The balances that appeared in the accounts of Edwin Parts are shown as follows.
Beginning
$ 89,900
25,400
102,600
Ending
Materials Inventory
Work-in-Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Prepare T-accounts to show the flow of costs during the period.
?
?
$ 93,200
154,800
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education