Prepare the journal entry to close out the MOH difference, given that the company wants to prorate it to the appropriate accounts based on their ending balances (before proration) (round proportions to four decimal places, if necessary). Did the proration of the MOH difference in part (d) have a significant effect on COGS this period? Explain how you could evaluate significance here. Specify the new adjusted COGS. If Locktin reported sales of $475,000 this year, what gross margin percentage did it earn? If the company goal was to generate at least a 35% gross margin, did it meet its goal? What does this tell us about Locktin's control of product costs this period?
Prepare the journal entry to close out the MOH difference, given that the company wants to prorate it to the appropriate accounts based on their ending balances (before proration) (round proportions to four decimal places, if necessary). Did the proration of the MOH difference in part (d) have a significant effect on COGS this period? Explain how you could evaluate significance here. Specify the new adjusted COGS. If Locktin reported sales of $475,000 this year, what gross margin percentage did it earn? If the company goal was to generate at least a 35% gross margin, did it meet its goal? What does this tell us about Locktin's control of product costs this period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
- Prepare the
journal entry to close out the MOH difference, given that the company wants to prorate it to the appropriate accounts based on their ending balances (before proration) (round proportions to four decimal places, if necessary). - Did the proration of the MOH difference in part (d) have a significant effect on COGS this period? Explain how you could evaluate significance here. Specify the new adjusted COGS.
- If Locktin reported sales of $475,000 this year, what gross margin percentage did it earn? If the company goal was to generate at least a 35% gross margin, did it meet its goal? What does this tell us about Locktin's control of product costs this period?
Transcribed Image Text:P8.2 (LO 1, 2, 3) AN The following T-accounts provide selected data about Locktin's financial results
for the year. Sadly, several key components went missing after a thief broke into the Locktin accounting
office:
WIP Inventory
RM Inventory
22,500 ?
75,000 ?
Beg. bal.
Beg. bal.
52,500
DM
72,000 282.000
End. bal.
18,000
DL
90,000
Applied MOH 112,500
End. bal
FG Inventory
90,000
??
монСontrol
(Total debits 111,000 ?
during the
year)
Beg. bal.
End. bal.
72,000
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