Concept explainers
1.
Journalize the given material transactions.
1.
Explanation of Solution
T-account: The condensed form of a ledger is referred to as T-account. The left-hand side of this account is known as debit, and the right hand side is known as credit.
Journalize the given material transactions.
S.no | Description | Post Ref | Debit ($) | Credit($) |
a. | Materials | 58,000 | ||
Accounts payable | 58,000 | |||
(To record material purchase) | ||||
b. | Work-in-process | 45,000 | ||
Factory | 8,000 | |||
Materials | 53,000 | |||
(To record direct material requisitioned to production) | ||||
c. | Materials | 900 | ||
Work-in process | 900 | |||
(To record direct materials returned to storeroom) | ||||
d. | Accounts payable | 1,500 | ||
Materials | 1,500 | |||
(To record materials returned to vendor) | ||||
e | Accounts payable | 51,500 | ||
Cash | 51,500 | |||
(To record payment made to vendor) |
Table (1)
Description:
a.
- Material is an asset account and it is increased. Therefore, debit the materials account.
- Accounts payable is a liability account and it is increased. Therefore, credit the accounts payable account.
b.
- Work-in-process is an asset account and it is increased. Therefore, debit the work-in-process account.
- Factory overhead is an expense account and it is increased. Therefore, debit the factory overhead account.
- Material is an asset account and it is decreased. Therefore, credit the materials account.
c.
- Material is an asset account and it is increased. Therefore, debit the materials account.
- Work-in-process is an asset account and it is decreased. Therefore, credit the work-in-process account.
d.
- Accounts payable is a liability account and it is decreased. Therefore, debit the accounts payable account.
- Material is an asset account and it is decreased. Therefore, credit the material account
e.
- Accounts payable is a liability account and it is decreased. Therefore, debit the accounts payable account.
- Cash is an asset account and it is decreased. Therefore, credit the material account
2.
2.
Explanation of Solution
Prepare T-account for Cash.
Cash | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 64,250 | (e) | 51,500 | ||||
Balance c/d | 12,750 | ||||||
64,250 | 64,250 |
Table (2)
Prepare T-account for materials.
Materials | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 23,500 | (b) | 53,000 | ||||
(a) | 58,000 | (d) | 1,500 | ||||
(c) | 900 | Balance c/d | 27,900 | ||||
82,400 | 82,400 |
Table (3)
Prepare T-account for accounts payable.
Accounts payable | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
(d) | 1,500 | Balance | 29,000 | ||||
(e) | 51,500 | (a) | 58,000 | ||||
Balance c/d | 34,000 | ||||||
87,000 | 87,000 |
Table (4)
Prepare T-account for Factory overhead.
Factory overhead | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
(b) | 8,000 |
Table (5)
Prepare T-account for work in process.
Work in process | |||||||
Date | Particulars | Post Ref. | Debit ($) | Date | Particulars | Post Ref. | Credit($) |
Balance | 31,000 | (c) | 900 | ||||
(b) | 45,000 | Balance c/d | 75,100 | ||||
76,000 | 76,000 |
Table (6)
3a.
Report the cash balance as on September 30.
3a.
Explanation of Solution
Cash balance during September 30 is $12,750.
3b.
Report the material balance as on September 30.
3b.
Explanation of Solution
Material balance during September 30 is $27,900.
3c.
Report the accounts payable balance as on September 30.
3c.
Explanation of Solution
Accounts payable balance during September 30 is $34,000.
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Chapter 2 Solutions
Principles of Cost Accounting
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- Hughes Products Inc. uses a job order cost system. Selected transactions dealing with factory items for the month follow: a. Requisitioned indirect materials from storeroom, 3,200. b. Purchased, on account, factory supplies for future needs, 4,400. c. Purchased parts, on account, for repairing a machine, 1,400. d. Requisitioned factory supplies from storeroom, 900. e. Returned other defective factory supplies to vendor, 700. f. Factory rent accrued for the month, 2,400. g. Returned previously requisitioned factory supplies to store room, 350. h. Depreciation of machinery and equipment, 2,800. i. Payroll taxes liability for month, 3,200. j. Heat, light, and power charges payable for the month, 6,400. k. Expired insurance on inventories, 1,350. l. Factory overhead applied to production, 34,600. m. Indirect labor for the month, 2,600. n. Goods completed and transferred to finished goods: materials, 14,400; labor, 40,400; factory overhead, 30,400. Required: Record the previous transactions. Assume that the records include a control account and a subsidiary ledger for factory overhead, to which the entries will be posted at some later date.arrow_forwardEntries for costs in a job order cost system Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March: A. Materials purchased on account, 770,000. B. Materials requisitioned, 680,000, of which 75,800 was for general factory use. C. Factory labor used, 756,000, of which 182,000 was indirect. D. Other costs incurred on account for factory overhead, 245,000; selling expenses, 171,500; and administrative expenses, 110,600. E. Prepaid expenses expired for factory overhead were 24,500; for selling expenses, 28,420; and for administrative expenses, 16,660. F. Depreciation of factory equipment was 49,500; of office equipment, 61,800; and of office building, 14,900. G. Factory overhead costs applied to jobs, 568,500. H. Jobs completed, 1,500,000. I. Cost of goods sold, 1,375,000. Instruction Journalize the entries to record the summarized operations.arrow_forwardThe post-closing trial balance of Custer Products, Inc. on April 30 is reproduced as follows: During May, the following transactions took place: a. Purchased raw materials at a cost of 45,000 and general factory supplies at a cost of 13,000 on account (recorded materials and supplies in the materials account). b. Issued raw materials to be used in production, costing 47,000, and miscellaneous factory supplies costing 15,000. c. Recorded the payroll and the payments to employees as follows: factory wages (including 12,000 indirect labor), 41,000; and selling and administrative salaries, 7,000. Additional account titles include Wages Payable and Payroll. (Ignore payroll withholdings and deductions.) d. Distributed the payroll in (c). e. Recognized depreciation for the month at an annual rate of 5% on the building, 10% on the factory equipment, and 20% on the office equipment. The sales and administrative staff uses approximately one-fifth of the building for its offices. f. Incurred other expenses totaling 11,000. One-fourth of this amount is allocable to the office function. g. Transferred total factory overhead costs to Work in Process. h. Completed and transferred goods with a total cost of 91,000 to the finished goods storeroom. i. Sold goods costing 188,000 for 362,000. (Assume that all sales were made on account.) j. Collected accounts receivable in the amount of 345,000. k. Paid accounts payable totaling 158,000. Required: 1. Prepare journal entries to record the transactions. 2. Set up T-accounts. Post the beginning trial balance and the journal entries prepared in (1) to the accounts and determine the balances in the accounts on May 31. 3. Prepare a statement of cost of goods manufactured, an income statement, and a balance sheet. (Round amounts to the nearest whole dollar.)arrow_forward
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