Raw material inventory Accounts payable Materials purchased on account Materials requisitioned to jobs Factory labor used in production Indirect materials incurred in production 50,000 50,000 Requires data from the exercise that must be en Represents a calculation or formula, or link with Need to input material amounts for all jobs Need to input labor amounts for all jobs General factory use means it can't be traced to any job and is allocated through factory ove General factory use means it can't be traced to any job and is allocated through factory ove
Raw material inventory Accounts payable Materials purchased on account Materials requisitioned to jobs Factory labor used in production Indirect materials incurred in production 50,000 50,000 Requires data from the exercise that must be en Represents a calculation or formula, or link with Need to input material amounts for all jobs Need to input labor amounts for all jobs General factory use means it can't be traced to any job and is allocated through factory ove General factory use means it can't be traced to any job and is allocated through factory ove
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter2: Job Order Costing
Section: Chapter Questions
Problem 2PA: Entries and schedules for unfinished jobs and completed jobs Kurtz Fencing Inc. uses a job order...
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![## Educational Guide: Journal Entries and Financial Recording
### Journal Entries Overview
#### a. Raw Material Inventory
- **Accounts Involved:**
* Debit: Raw material inventory
* Credit: Accounts payable
- **Amount:** $50,000
- **Explanation:** Represents materials purchased on account.
#### b. Materials Requisitioned to Jobs
- **Explanation:** Need to input material amounts for all jobs; requires data from the exercise for proper entry.
#### c. Factory Labor Used in Production
- **Explanation:** Need to input labor amounts for all jobs; considered part of factory overhead as it includes indirect labor which cannot be traced directly to any job.
#### d. Indirect Materials and Labor Incurred in Production
- **Accounts Involved:**
* Debit: Factory overhead
* Credit: Accounts payable
- **Amount:** $1,800
- **Explanation:** General factory use items are allocated through factory overhead rather than directly to a job.
#### e. Factory Overhead and Accumulated Depreciation
- **Accounts Involved:**
* Debit: Factory overhead
* Credit: Accumulated depreciation
- **Amount:** $2,700
- **Explanation:** Records depreciation expenses incurred in production.
#### f. Work In Process (WIP) Inventory
- **Accounts Involved:**
* Debit: WIP inventory
* Credit: Factory overhead
- **Amount:** $12,000
- **Explanation:** To record factory overhead applied. Calculated using total machine hours multiplied by the factory overhead rate.
#### g. Finished Goods Inventory
- **Accounts Involved:**
* Debit: Finished goods inventory
* Credit: WIP inventory
- **Explanation:** Transfer costs from WIP to Finished Goods based on completed jobs.
#### h. Accounts Receivable
- **Accounts Involved:**
* Debit: Accounts receivable
* Credit: Sales
- **Amount:** $37,950
- **Explanation:** For recording the sale of jobs, amount represents total bills for shipped jobs.
#### i. Cost of Goods Sold
- **Accounts Involved:**
* Debit: Cost of goods sold
* Credit: Finished goods inventory
- **Explanation:** To record the cost associated with the jobs sold based on completed jobs.
---
### Schedule and Analysis Tables
#### 1. Schedule of Unfinished Jobs
| **Job No** | **](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F485898ce-dbac-4a14-8c55-3f3ae529f33f%2Fdf65d131-ab0a-4d35-93b8-904c6be4a96f%2Fipz0u3l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:## Educational Guide: Journal Entries and Financial Recording
### Journal Entries Overview
#### a. Raw Material Inventory
- **Accounts Involved:**
* Debit: Raw material inventory
* Credit: Accounts payable
- **Amount:** $50,000
- **Explanation:** Represents materials purchased on account.
#### b. Materials Requisitioned to Jobs
- **Explanation:** Need to input material amounts for all jobs; requires data from the exercise for proper entry.
#### c. Factory Labor Used in Production
- **Explanation:** Need to input labor amounts for all jobs; considered part of factory overhead as it includes indirect labor which cannot be traced directly to any job.
#### d. Indirect Materials and Labor Incurred in Production
- **Accounts Involved:**
* Debit: Factory overhead
* Credit: Accounts payable
- **Amount:** $1,800
- **Explanation:** General factory use items are allocated through factory overhead rather than directly to a job.
#### e. Factory Overhead and Accumulated Depreciation
- **Accounts Involved:**
* Debit: Factory overhead
* Credit: Accumulated depreciation
- **Amount:** $2,700
- **Explanation:** Records depreciation expenses incurred in production.
#### f. Work In Process (WIP) Inventory
- **Accounts Involved:**
* Debit: WIP inventory
* Credit: Factory overhead
- **Amount:** $12,000
- **Explanation:** To record factory overhead applied. Calculated using total machine hours multiplied by the factory overhead rate.
#### g. Finished Goods Inventory
- **Accounts Involved:**
* Debit: Finished goods inventory
* Credit: WIP inventory
- **Explanation:** Transfer costs from WIP to Finished Goods based on completed jobs.
#### h. Accounts Receivable
- **Accounts Involved:**
* Debit: Accounts receivable
* Credit: Sales
- **Amount:** $37,950
- **Explanation:** For recording the sale of jobs, amount represents total bills for shipped jobs.
#### i. Cost of Goods Sold
- **Accounts Involved:**
* Debit: Cost of goods sold
* Credit: Finished goods inventory
- **Explanation:** To record the cost associated with the jobs sold based on completed jobs.
---
### Schedule and Analysis Tables
#### 1. Schedule of Unfinished Jobs
| **Job No** | **
![### PR 2-2A Entries and Schedules for Unfinished Jobs and Completed Jobs
#### Overview
Ottoson Fencing Inc. uses job-order costing. The following data summarize the operations related to production for December, the first month of operations:
#### Data Summary
1. **Materials purchased on account**: $50,000.
2. **Materials requisitioned and factory labor used**:
| Job | Materials | Factory Labor |
|-----|-----------|---------------|
| 301 | $1,850 | $2,500 |
| 302 | $3,150 | $7,220 |
| 303 | $2,200 | $5,350 |
| 304 | $1,290 | $2,300 |
| 305 | $4,230 | $6,225 |
| 306 | $1,270 | $2,900 |
| For general factory use | $1,200 | $5,000 |
3. **Factory overhead costs incurred on account**: $1,800.
4. **Depreciation of machinery and equipment**: $2,700.
5. **Factory overhead rate is $40 per machine hour**. Machine hours used:
| Job | Machine Hours |
|-----|---------------|
| 301 | 30 |
| 302 | 60 |
| 303 | 41 |
| 304 | 63 |
| 305 | 70 |
| 306 | 36 |
| **Total** | **300** |
6. **Jobs completed**: 301, 302, 303, and 305.
7. **Jobs were shipped and customers were billed as follows**:
- Job 301: $29,000
- Job 302: $16,150
- Job 303: $12,800
#### Instructions
1. **Journalize the entries to record the summarized operations.**
2. **Post the appropriate entries to T accounts for Work in Process and Finished Goods**, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
3. **Prepare a schedule of unfinished jobs** to support the balance in the work in process account.
4. **Prepare a schedule of completed jobs on](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F485898ce-dbac-4a14-8c55-3f3ae529f33f%2Fdf65d131-ab0a-4d35-93b8-904c6be4a96f%2Fd9ignap_processed.png&w=3840&q=75)
Transcribed Image Text:### PR 2-2A Entries and Schedules for Unfinished Jobs and Completed Jobs
#### Overview
Ottoson Fencing Inc. uses job-order costing. The following data summarize the operations related to production for December, the first month of operations:
#### Data Summary
1. **Materials purchased on account**: $50,000.
2. **Materials requisitioned and factory labor used**:
| Job | Materials | Factory Labor |
|-----|-----------|---------------|
| 301 | $1,850 | $2,500 |
| 302 | $3,150 | $7,220 |
| 303 | $2,200 | $5,350 |
| 304 | $1,290 | $2,300 |
| 305 | $4,230 | $6,225 |
| 306 | $1,270 | $2,900 |
| For general factory use | $1,200 | $5,000 |
3. **Factory overhead costs incurred on account**: $1,800.
4. **Depreciation of machinery and equipment**: $2,700.
5. **Factory overhead rate is $40 per machine hour**. Machine hours used:
| Job | Machine Hours |
|-----|---------------|
| 301 | 30 |
| 302 | 60 |
| 303 | 41 |
| 304 | 63 |
| 305 | 70 |
| 306 | 36 |
| **Total** | **300** |
6. **Jobs completed**: 301, 302, 303, and 305.
7. **Jobs were shipped and customers were billed as follows**:
- Job 301: $29,000
- Job 302: $16,150
- Job 303: $12,800
#### Instructions
1. **Journalize the entries to record the summarized operations.**
2. **Post the appropriate entries to T accounts for Work in Process and Finished Goods**, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month.
3. **Prepare a schedule of unfinished jobs** to support the balance in the work in process account.
4. **Prepare a schedule of completed jobs on
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