The Polaris Company uses a job-order costing system. The following transactions occurred in October: a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $190,000 ($178,000 direct materials and $12,000 indirect materials). c. Accrued direct labor cost of $90,000 and indirect labor cost of $110,000. d. Depreciation recorded on factory equipment, $40,000. e. Other manufacturing overhead costs accrued during October, $70,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 30,000 machine-hours were used in October. g. Jobs costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 25% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $42,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

nit.3

The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $190,000 ($178,000 direct materials and $12,000 indirect materials).
c. Accrued direct labor cost of $90,000 and indirect labor cost of $110,000.
d. Depreciation recorded on factory equipment, $40,000.
e. Other manufacturing overhead costs accrued during October, $70,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of
30,000 machine-hours were used in October.
g. Jobs costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These
jobs were sold on account at 25% above cost.
Required:
1. Prepare journal entries to record the transactions given above.
2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account.
Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $42,000.
Transcribed Image Text:The Polaris Company uses a job-order costing system. The following transactions occurred in October: a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $190,000 ($178,000 direct materials and $12,000 indirect materials). c. Accrued direct labor cost of $90,000 and indirect labor cost of $110,000. d. Depreciation recorded on factory equipment, $40,000. e. Other manufacturing overhead costs accrued during October, $70,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 30,000 machine-hours were used in October. g. Jobs costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 25% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $42,000.
Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Costing Systems
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education