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Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $39,00Ỏ. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Job 27 Job 33 Highlands Mall Pine Ridge Estates $15,825 13,800 $ 52,800 26,400 10,560 Materials and equipment Direct labor Overhead (applied) 5,520 Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment Direct labor (wages payable) $3,300 $5,100 $4,900 $3,200 4,800 7,050 6,200 1,900 Other May Events 1. Received $12,800 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $9,700 on account. 3. Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $680. 5. Issued supplies and incidental materials for current jobs costing $185. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation $580 705 350 630 230 355 480

Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $39,00Ỏ. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Job 27 Job 33 Highlands Mall Pine Ridge Estates $15,825 13,800 $ 52,800 26,400 10,560 Materials and equipment Direct labor Overhead (applied) 5,520 Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment Direct labor (wages payable) $3,300 $5,100 $4,900 $3,200 4,800 7,050 6,200 1,900 Other May Events 1. Received $12,800 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $9,700 on account. 3. Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $680. 5. Issued supplies and incidental materials for current jobs costing $185. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation $580 705 350 630 230 355 480

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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Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $39,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Job 27 Job 33 Highlands Mall Pine Ridge Estates $ 52,800 Materials and equipment Direct labor $15,825 13,800 5,520 26,400 10,560 Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment Direct labor (wages payable) $3,300 $5,100 $4,900 $3,200 7,050 4,800 6,200 1,900 Other May Events 1. Received $12,800 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $9,700 on account. 3. Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $680. 5. Issued supplies and incidental materials for current jobs costing $185. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). $580 705 Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation 350 630 230 355 480
Transcribed Image Text:Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $39,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Job 27 Job 33 Highlands Mall Pine Ridge Estates $ 52,800 Materials and equipment Direct labor $15,825 13,800 5,520 26,400 10,560 Overhead (applied) Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment Direct labor (wages payable) $3,300 $5,100 $4,900 $3,200 7,050 4,800 6,200 1,900 Other May Events 1. Received $12,800 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $9,700 on account. 3. Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $680. 5. Issued supplies and incidental materials for current jobs costing $185. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). $580 705 Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation 350 630 230 355 480
Required: a. Prepare journal entries to record the flow of costs for operations during May. b. Calculate the amount of over- or underapplied overhead for the month. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare journal entries to record the flow of costs for operations during May. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list > А Record $12,800 payment received on account. Record purchase of materials and equipment of $9,700 on account. В Record billing of $133,000. D Record receipt of $90,000 towards the billings. lebit Credit E Record indirect labor cost of $680. Record issue of supplies and incidental materials for current jobs costing $185. G Record overhead, advertising and depreciation cost as Note : = journal entry has been entered Record entry Clear entry View general journal
Transcribed Image Text:Required: a. Prepare journal entries to record the flow of costs for operations during May. b. Calculate the amount of over- or underapplied overhead for the month. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare journal entries to record the flow of costs for operations during May. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list > А Record $12,800 payment received on account. Record purchase of materials and equipment of $9,700 on account. В Record billing of $133,000. D Record receipt of $90,000 towards the billings. lebit Credit E Record indirect labor cost of $680. Record issue of supplies and incidental materials for current jobs costing $185. G Record overhead, advertising and depreciation cost as Note : = journal entry has been entered Record entry Clear entry View general journal
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