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Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $83,500 of materials. 2. Paid $88,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop. 3. Issued $6,800 of supplies from the materials inventory. 4. Issued $91,500 in direct materials to the production department 5. Incurred direct labor costs of $81,500, which were credited to Wages Payable. 6. Paid for the materials purchased in transaction (1) 7. Incurred $14,900 in indirect labor costs, which were credited to Wages Payable 8. Applied overhead on the basis of 155 percent of direct labor costs. 9. Recognized depreciation on manufacturing property, plant, and equipment of $19.000. 10. Returned $1,400 of the materials in transaction (3) to inventory. 11. Paid the for the wages incurred in transaction (5) The following balances appeared in the accounts of Ervin Equipment for January Paterials Inventory work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Required Beginning $ 31,300 $1,900 102,200 Ending $ 120,500 248,600

Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $83,500 of materials. 2. Paid $88,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop. 3. Issued $6,800 of supplies from the materials inventory. 4. Issued $91,500 in direct materials to the production department 5. Incurred direct labor costs of $81,500, which were credited to Wages Payable. 6. Paid for the materials purchased in transaction (1) 7. Incurred $14,900 in indirect labor costs, which were credited to Wages Payable 8. Applied overhead on the basis of 155 percent of direct labor costs. 9. Recognized depreciation on manufacturing property, plant, and equipment of $19.000. 10. Returned $1,400 of the materials in transaction (3) to inventory. 11. Paid the for the wages incurred in transaction (5) The following balances appeared in the accounts of Ervin Equipment for January Paterials Inventory work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Required Beginning $ 31,300 $1,900 102,200 Ending $ 120,500 248,600

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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Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $83,500 of materials. 2. Paid $88,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop. 3. Issued $6,800 of supplies from the materials inventory. 4. Issued $91,500 in direct materials to the production department 5. Incurred direct labor costs of $81,500, which were credited to Wages Payable. 6. Paid for the materials purchased in transaction (1) 7. Incurred $14,900 in indirect labor costs, which were credited to Wages Payable. 8. Applied overhead on the basis of 155 percent of direct labor costs. 9 Recognized depreciation on manufacturing property, plant, and equipment of $19.000. 10. Returned $1,400 of the materials in transaction (3) to inventory. 11. Paid the for the wages incurred in transaction (5) The following balances appeared in the accounts of Ervin Equipment for January naterials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Required: Beginning $31,300 51,900 102,200 Ending ? $ 120,500 248,600
Transcribed Image Text:Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $83,500 of materials. 2. Paid $88,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop. 3. Issued $6,800 of supplies from the materials inventory. 4. Issued $91,500 in direct materials to the production department 5. Incurred direct labor costs of $81,500, which were credited to Wages Payable. 6. Paid for the materials purchased in transaction (1) 7. Incurred $14,900 in indirect labor costs, which were credited to Wages Payable. 8. Applied overhead on the basis of 155 percent of direct labor costs. 9 Recognized depreciation on manufacturing property, plant, and equipment of $19.000. 10. Returned $1,400 of the materials in transaction (3) to inventory. 11. Paid the for the wages incurred in transaction (5) The following balances appeared in the accounts of Ervin Equipment for January naterials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold Required: Beginning $31,300 51,900 102,200 Ending ? $ 120,500 248,600
a. Prepare journal entries to record the transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries to record the transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list View journal entry worksheet No G Transactions Materials Inventory General Journal Required B > Debit Credit Ⓡ
Transcribed Image Text:a. Prepare journal entries to record the transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold. Complete this question by entering your answers in the tabs below. Required A Required B Prepare journal entries to record the transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list View journal entry worksheet No G Transactions Materials Inventory General Journal Required B > Debit Credit Ⓡ
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