Concept explainers
1.
Prepare general journal entries to record transactions (a) through (i).
1.
Explanation of Solution
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.
Date | Accounts title and explanation |
Debit ($) |
Credit ($) |
a. | Material | 44,000 | |
Accounts payable | 44,000 | ||
(To record the purchase of materials on account.) | |||
b. | Work in process | 8,200 | |
Work in process | 9,100 | ||
Work in process | 7,300 | ||
Work in process | 8,500 | ||
Materials | 33,100 | ||
(To record direct materials incurred for the job: job no.501, 502,503,504) | |||
c. | Factory overhead | 5,000 | |
Materials | 5,000 | ||
(To record the issuance of indirect materials) | |||
d. | Work in process | 4,800 | |
Work in process | 4,100 | ||
Work in process | 4,800 | ||
Work in process | 5,000 | ||
Wages payable | 18,700 | ||
(To record direct labor incurred for the job: job no.501, 502,503,504) | |||
e. | Factory overhead | 3,300 | |
Wages payable | 3,300 | ||
(To record the indirect labor charged to production) | |||
f. | Factory overhead | 5,200 | |
Cash | 5,200 | ||
(To record the payment of electricity bill, heating oil, and repairs bills for the factory and charge made to production) | |||
g. | Work in process | 3,100 | |
Work in process | 3,300 | ||
Work in process | 3,300 | ||
Work in process | 3,800 | ||
Factory overhead | 13,500 | ||
(To record applied factory overhead to the job: job no.501,502,503,504) | |||
h. | Finished goods (Product W) | 16,100 | |
Work in process | 16,100 | ||
(To record the transfer of Job no. 501 to Product W) | |||
Finished goods (Product X) | 16,500 | ||
Work in process | 16,500 | ||
(To record the transfer of Job no.502 to Product X) | |||
Finished goods (Product Y) | 15,400 | ||
Work in process | 15,400 | ||
(To record the transfer of Job no.503 to Product Y) | |||
Finished goods (Product Z) | 17,300 | ||
Work in process | 17,300 | ||
(To record the transfer of Job no.504 to Product Z) | |||
i. | 17,500 | ||
Sales | 17,500 | ||
(To record sale of product W) | |||
Cost of goods sold | 16,100 | ||
Finished goods (Product W) | 16,100 | ||
(To record cost of goods sold on finished goods of Product W) | |||
Accounts receivable | 18,000 | ||
Sales | 18,000 | ||
(To record sale of product X) | |||
Cost of goods sold | 16,500 | ||
Finished goods (Product X) | 16,500 | ||
(To record cost of goods sold on finished goods of Product X) | |||
Accounts receivable | 16,900 | ||
Sales | 16,900 | ||
(To record sale of product Y) | |||
Cost of goods sold | 15,400 | ||
Finished goods (Product Y) | 15,400 | ||
(To record cost of goods sold on finished goods of Product Y) | |||
Accounts receivable | 19,000 | ||
Sales | 19,000 | ||
(To record sale of product Z) | |||
Cost of goods sold | 17,300 | ||
Finished goods (Product Z) | 17,300 | ||
(To record cost of goods sold on finished goods of Product Z) |
(Table 1)
2.
2.
Explanation of Solution
Post the entries to the work in process and finished goods T accounts.
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