Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $78,500 of materials 2. Paid $83,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop 3 Issued $5,800 of supplies from the materials inventory 4. Issued $86,500 in direct materials to the production department 5. Incurred direct labor costs of $76.500, which were credited to Wages Payable 6. Paid for the materials purchased in transaction (1) 7. Incurred $13,900 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 $18,000. 10. Returned $1,200 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 Beginning $29,300 50,900 100,200 Coding Haterials Inventory Mork In Process Inventory Finished Goods Inventory Cost of Goods Sold Required: 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 $ 115,500 246,600
Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January 1. Purchased $78,500 of materials 2. Paid $83,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop 3 Issued $5,800 of supplies from the materials inventory 4. Issued $86,500 in direct materials to the production department 5. Incurred direct labor costs of $76.500, which were credited to Wages Payable 6. Paid for the materials purchased in transaction (1) 7. Incurred $13,900 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 $18,000. 10. Returned $1,200 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 Beginning $29,300 50,900 100,200 Coding Haterials Inventory Mork In Process Inventory Finished Goods Inventory Cost of Goods Sold Required: 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 $ 115,500 246,600
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $78,500 of materials
2. Paid $83,500 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop
3 Issued $5,800 of supplies from the materials inventory
4. Issued $86,500 in direct materials to the production department
5. Incurred direct labor costs of $76,500, which were credited to Wages Payable
6. Paid for the materials purchased in transaction (1)
7. Incurred $13,900 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 $18,000
10. Returned $1,200 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
Materials Inventory
Work In Process Inventory
Finished Goods Inventory
Cost of Goods Sold
Beginning
$ 29,300
50,900
100,200
Coding
$ 115,500
246,600
Required:
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
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