Chapter 19, Problem E19.24E

Preparing job order costing journal entries
Learning Objectives 2, 3, 4, 5i. Underallocated by $9,650
Journalize the following transactions for Marge's Sofas. Explanations are not required.

1. Incurred and paid Web site expenses, $2,000.
2. Incurred manufacturing wages of $1,000,75% of which was direct labor and 25% of which was indirect labor.
3. Purchased raw materials on account, $24,000.
4. Used in production: direct materials, $7,500; indirect materials. $5,000.
5. Recorded manufacturing overhead: depreciation on plant, $18,000: plant insurance (previously paid), $1,500; plant property tax, $3,900 (credit Property Tax Payable).
6. Allocated manufacturing overhead to jobs, 200% of direct labor costs.
7. Completed production on jobs with costs of $40,000.
8. Sold inventory on account, $22,000; cost of goods sold, $18,000.
9. Adjusted for overallocated or underallocated overhead.