Answered: Kim's Asphalt does driveway and parking…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Please help I am having trouble with this question. I will attach Images with better quality and some parts I have answered and parts I am missing. Thank you :)

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 Highlands Mall	Job 33 Pine Ridge Estates
Materials and equipment	$	15,825	$	52,800
Direct labor		13,800		26,400
Overhead (applied)		5,520		10,560

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	$	3,300		$	5,100	$	4,900	$	3,200
Direct labor (wages payable)		4,800			7,050		6,200		1,900

Other May Events

Received $12,800 payment on Job 24 delivered to customer in April.
Purchased materials and equipment for $9,700 on account.
Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount.
Determined that payroll for indirect labor personnel totaled $680.
Issued supplies and incidental materials for current jobs costing $185.
Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation).


Property taxes	$	580
Storage area rental		705
Truck and delivery cost		350
Advertising and promotion campaign		630
Inspections		230
Telephone and other miscellaneous		355
Equipment depreciation		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.

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 MallPine Ridge Estates
Materials and equipment $
15,825
13,800
5,520
52,800
26,400
10,560
Direct labor
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
$3,300 $5,100 $4,900 $3,200
7,050 6,200
Direct labor (wages payable) 4,800
1,900
Other May Events
Received $12,800 payment on Job 24 delivered to customer in April.
Purchased materials and equipment for $9,700 on account.
Billed Pine Ridge Estates $133,000 and received payment for $90,000 of that amount.
Determined that payroll for indirect labor personnel totaled $680.
Issued supplies and incidental materials for current jobs costing $185.
Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation).
1.
2.
3.
4.
5.
6.
$ 580
Property taxes
Storage area rental
Truck and deli
Advertising and promotion campaign
Inspections
Telephone and other miscellaneous
Equipment depreciation
705
ry cost
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.

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
View journal entry worksheet
No
Transaction
General Journal
Debit
Credit
A
1.
Cash
12,800
Accounts receivable
12,800
B
02
Materials and equipment inventory
9,700
Accounts payable
9,700
За
Accounts receivable
133,000
Sales revenue
133,000
D
3b
Cash
90,000
Accounts receivable
90,000
E
04
Manufacturing overhead
680
Wages payable
680
F
05
Manufacturing overhead
185
Materials and equipment inventory
185
G
06
Manufacturing overhead
2,700
Selling costs-Advertising
630
Cash
2,850
Accumulated depreciation
480
Work-in-process-Materials and equipment
Work-in-process-Direct labor
Work-in-process-Overhead applied
H
07
Wages payable
Materials and equipment inventory
Overhead applied
08
Cost of installations completed and sold
Work-in-process-Direct labor
Work-in-process-Overhead applied
Work-in-process–Materials and equipment
Required A
Required B
>

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions