Chapter 27, Problem 1CE

LO2 Prepare adjusting entries at December 31 for J P Company based on the following data.

1. (a) Factory overhead is applied at a rate of 75% of direct labor costs. At the end of the year, the direct labor costs associated with the jobs in process totaled $8,000.
2. (b) A physical count of factory supplies at the end of the year shows that $4,920 of factory supplies were used during the year.
3. (c) Depreciation expense for the year on the factory building was $8,700 and on factory equipment was $11,600, a total of $20,300.
4. (d) The factory overhead account has a debit balance of $186,500 and a credit balance of $183,900 [after recording adjustments (a) through (c)].