College Accounting - Study Guide / Working Papers 1-15
College Accounting - Study Guide / Working Papers 1-15
23rd Edition
ISBN: 9781337913560
Author: HEINTZ
Publisher: CENGAGE L
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Chapter 26, Problem 9SPA

JOB ORDER COSTING TRANSACTIONS Stonestreet Enterprises makes garage doors. During the month of February, the company had four job orders: 205, 206, 207, and 208. Overhead was applied at predetermined rates, while actual factory overhead was recorded as incurred. All four jobs were completed.

  1. (a) Purchased raw materials on account, $44,000.
  2. (b) Issued direct materials to production:

Chapter 26, Problem 9SPA, JOB ORDER COSTING TRANSACTIONS Stonestreet Enterprises makes garage doors. During the month of , example  1

  1. (c) Issued indirect materials to production, $5,700.
  2. (d) Incurred direct labor costs:

Chapter 26, Problem 9SPA, JOB ORDER COSTING TRANSACTIONS Stonestreet Enterprises makes garage doors. During the month of , example  2

  1. (e) Charged indirect labor to production, $3,400.
  2. (f) Paid electricity, heating oil, and repair bills for the factory and charged to production, $5,300.
  3. (g) Applied factory overhead to each of the jobs using a predetermined factory over-head rate as follows:

Chapter 26, Problem 9SPA, JOB ORDER COSTING TRANSACTIONS Stonestreet Enterprises makes garage doors. During the month of , example  3

  1. (h) Finished Job Nos. 205-208 and transferred to the finished goods inventory account as products L, M, N, and O, respectively.
  2. (i) Sold products L, M, N, and O, on account, for $21,000, $20,300, $ 19,000, and $20,500, respectively.

REQUIRED

  1. 1. Prepare general journal entries to record transactions (a) through (i). Make compound entries for (b), (d), and (g), with separate debits for each job.
  2. 2. Post the entries to the work in process and finished goods T accounts only.

1.

Expert Solution
Check Mark
To determine

Prepare general journal entries to record transactions (a) through (i) and make compound entries for (b), (d), and (g), with separate debits for each job.

Explanation of Solution

Job order costing:

Job order costing is one of the methods of cost accounting under which cost is collected and gathered for each job, work order, or project separately. It is a system by which a factory maintains a separate record of each particular quantity of product that passes through the factory. Job order costing is used when the products produced are significantly different from each other.

Prepare journal entry to record the given transactions.

DateAccounts title and explanation

Debit

($)

Credit

($)

a.Material 44,000 
      Accounts payable 44,000
 (To record the purchase of materials on account.)  
    
b.Work in process8,500 
 Work in process9,600 
 Work in process8,000 
 Work in process9,000 
      Materials  35,100
 (To record direct materials incurred for the job: job no.205,206,207,208)  
    
c.Factory overhead5,700 
      Materials  5,700
 (To record the issuance of  indirect materials)  
    
d.Work in process5,400 
 Work in process4,600 
 Work in process5,200 
 Work in process5,500 
      Wages payable 20,700
 (To record direct labor incurred for the job: job no.205,206,207,208)  
    
e.Factory overhead3,400 
      Wages payable 3,400
 (To record the indirect labor charged to production)  
    
f.Factory overhead5,300 
      Cash 5,300
 (To record the payment of electricity bill, heating  oil, and repairs bills for the factory and charge made to production)  
    
g.Work in process3,300 
 Work in process3,900 
 Work in process3,300 
 Work in process3,900 
      Factory  overhead 14,400
 (To record  applied factory overhead to the job: job no.205,206,207,208)  
    
h.Finished goods (Product L) [$8,500+$5,400+$3,300] 17,200 
      Work in process 17,200
 (To record the transfer of Job no. 205 to  Product L)  
    
 Finished goods (Product M) [$9,600+$4,600+$3,900]18,100 
      Work in process 18,100
 (To record the transfer of Job no.206 to  Product M)  
    
 Finished goods (Product N) [$8,000+$5,200+$3,300]16,500 
      Work in process 16,500
 (To record the transfer of Job no.207 to  Product N)  
    
 Finished goods (Product O)  [$9,000+$5,500+$3,900]18,400 
      Work in process 18,400
 (To record the transfer of Job no.208 to  Product O)  
    
i.Accounts receivable21,000 
      Sales  21,000
 (To record sale of product L)  
    
 Cost of goods sold [$8,500+$5,400+$3,300]17,200 
      Finished goods (Product L) 17,200
 (To record cost of goods sold on finished goods of Product L)  
    
 Accounts receivable20,300 
      Sales  20,300
 (To record sale of product M)  
    
 Cost of goods sold [$9,600+$4,600+$3,900]18,100 
      Finished goods (Product M) 18,100
 (To record cost of goods sold on finished goods of Product M)  
    
 Accounts receivable19,000 
      Sales  19,000
 (To record sale of product N)  
    
 Cost of goods sold [$8,000+$5,200+$3,300]16,500 
      Finished goods (Product N) 16,500
 (To record cost of goods sold on finished goods of Product N)  
    
 Accounts receivable20,500 
      Sales  20,500
 (To record sale of product O)  
    
 Cost of goods sold [$9,000+$5,500+$3,900]18,400 
      Finished goods (Product O) 18,400
 (To record cost of goods sold on finished goods of Product O)  

 (Table 1)

2.

Expert Solution
Check Mark
To determine

Post the entries to the work in process and finished goods T accounts.

Explanation of Solution

College Accounting - Study Guide / Working Papers 1-15, Chapter 26, Problem 9SPA , additional homework tip  1

College Accounting - Study Guide / Working Papers 1-15, Chapter 26, Problem 9SPA , additional homework tip  2

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Chapter 26 Solutions

College Accounting - Study Guide / Working Papers 1-15

Ch. 26 - Prob. 1CECh. 26 - Prob. 2CECh. 26 - Prob. 3CECh. 26 - Prob. 1RQCh. 26 - Prob. 2RQCh. 26 - Prob. 3RQCh. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - Prob. 6RQCh. 26 - Prob. 7RQCh. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQCh. 26 - Prob. 11RQCh. 26 - Prob. 12RQCh. 26 - Prob. 13RQCh. 26 - Prob. 14RQCh. 26 - Prob. 15RQCh. 26 - COST OF GOODS SOLD SECTION The following...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED The...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOURNAL ENTRIES FOR FACTORY OVERHEAD Huang Company...Ch. 26 - PREDETERMINED FACTORY OVERHEAD RATE Millerlile...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, OVERHEAD, AND...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED AND COST OF...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOB ORDER COSTING TRANSACTIONS Stonestreet...Ch. 26 - JOB ORDER COSTING WITH UNDER- AND OVERAPPLIED...Ch. 26 - COST OF GOODS SOLD SECTION The following...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED The...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL, LABOR, AND OVERHEAD...Ch. 26 - JOURNAL ENTRIES FOR FACTORY OVERHEAD Bandy Company...Ch. 26 - PREDETERMINED FACTORY OVERHEAD RATE Marston...Ch. 26 - JOURNAL ENTRIES FOR MATERIAL. LABOR, OVERHEAD, AND...Ch. 26 - SCHEDULE OF COST OF GOODS MANUFACTURED AND COST OF...Ch. 26 - Prob. 8SPBCh. 26 - JOB ORDER COSTING TRANSACTIONS D K Enterprises...Ch. 26 - Prob. 10SPBCh. 26 - Prob. 1MYWCh. 26 - Forester Manufacturing Company uses a job order...Ch. 26 - Prob. 1CP
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