Answered: ls inventory (X, $17,250; Y, $11,500;…

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

Watkins Machinery Company uses a normal job costing system. The company has the following partial trial balance information for March, the last month of its fiscal year:

Materials inventory (X, $17,250; Y, $11,500; Indirect materials, $28,750)	$ 57,500
Work-in-process inventory (this is Job 101)	28,800
Finished goods inventory (this is Job 100)	48,000

These transactions relate to the month of March:

Purchased direct materials and indirect materials with the following summary of receiving reports:

Material X	$ 57,500
Material Y	57,500
Indirect materials	28,750
Total	$ 143,750

Issued direct materials and indirect materials with this summary of requisitions:

	Job 101	Job 102	Total
Material X	$ 28,750	$ 17,250	$ 46,000
Material Y	23,000	3,000	26,000
Subtotal	$ 51,750	$ 20,250	$ 72,000
Indirect materials			46,000
Total			$ 118,000

Factory labor incurred is summarized by these time tickets:

Job 101	$ 57,600
Job 102	38,400
Indirect labor	28,750
Total	$ 124,750

Factory utilities, factory depreciation, and factory insurance incurred is summarized as follows:

Utilities	$ 2,875
Depreciation	86,250
Insurance	14,375
Total	$ 103,500

Factory overhead costs were applied to jobs at the predetermined rate of $15 per machine hour. Job 101 incurred 6,900 machine hours; Job 102 used 4,600 machine hours.
Job 101 was completed; Job 102 was still in process at the end of March.
Job 100 and Job 101 were shipped to customers during March. Both jobs had gross margins of 20% based on manufacturing cost.
The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of March.

PLease help with this one

2. Compute the ending balance of the Work-in-process inventory account.

Required 1

Prepare journal entries to record the transactions for the events from parts (a) through (g). (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Transaction	General Journal	Debit	Credit
1	(a)	Materials inventory	143,750
		Accounts payable		143,750

2	(b)	Work-in-process inventory	72,000
		Factory overhead	46,000
		Materials inventory		118,000

3	(c)	Work-in-process inventory	96,000
		Factory overhead	28,750
		Accrued payroll		124,750

4	(d)	Factory overhead	103,500
		Utilities payable		2,875
		Accumulated depreciation—Factory		86,250
		Prepaid insurance		14,375

5	(e)	Work-in-process inventory	172,500
		Factory overhead		172,500

6	(f)	Finished goods inventory	241,650
		Work-in-process inventory		241,650

7	(g)	Accounts receivable	347,580
		Sales		347,580

8		Cost of goods sold	289,650
		Finished goods inventory		289,650

Required 2
Compute the ending balance of the Work-in-process inventory account.


Direct materials	$
Direct labor
Factory overhead applied
Total ending balance	$

Required 3

Compute the overhead variance and indicate whether it is overapplied or underapplied.


Actual factory overhead
Indirect materials	$46,000
Indirect labor	28,750
Utilities	2,875
Depreciation	86,250
Insurance	14,375	$178,250
Less: Applied factory overhead		172,500
Underapplied factory overhead		$5,750

Required 4

Close the overhead variance to the Cost of goods sold account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

No	Transaction	General Journal	Debit	Credit
1	(h)	Cost of goods sold	5,750
		Factory overhead		5,750

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