Question

Robert Perez is a contractor specializing in custom-built jacuzzis. On May 1, 2017, his ledger contains the following data.
Raw Materials Inventory $30,000 Work in Process Inventory 12,200 Manufacturing Overhead 2,500 (dr.) The Manufacturing Overhead account has debit totals of $12,500 and credit totals of $10,000.

Subsidiary data for Work in Process Inventory on May 1 include: Job Cost Sheets Job Manufacturing by Customer Direct Materials Direct Labor Overhead Stiner $2,500 $2,000 $1,400 Alton 2,000 1,200 840 Herman 900 800 560 $5,400 $4,000 $2,800

During May, the following costs were incurred: Raw materials purchased on account $4,000, Labor paid $7,000, and Manufacturing Overhead paid $1,400.

A summary of materials requisition slips and time tickets for the month of May reveals the following. Job by Customer Materials Requisition Slips Time Tickets Stiner $ 500 $ 400 Alton 600 1,000 Herman 2,300 1,300 Smith 1,900 2,300 5,300 5,000 General use 1,500 2,000 $6,800 $7,000

Overhead was charged to jobs on the basis of $0.70 per dollar of direct labor cost. The Jacuzzis for customers Stiner, Alton, and Herman were completed during May. The three Jacuzzis were sold for a total of $36,000.
Instructions (a) Prepare journal entries for the May transactions: (i) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (ii) assignment of raw materials, labor, and overhead to production; and completion of jobs and(iii) sale of goods. (iii) Post the entries to Work in Process Inventory. Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs. (MAKE A SHORT SCHEDULE FOR THIS.)

Answer 1

	Stiner	Alton	Herman	Smith	Total
Beginning Balance	$            5,900	$         4,040	$          2,260		$       12,200
Direct Material	$               500	$            600	$          2,300	$      1,900	$          5,300
Direct Labor	$               400	$         1,000	$          1,300	$      2,300	$          5,000
Manufacturing Overhead	$               280	$            700	$             910	$      1,610	$          3,500
Total	$           7,080	$        6,340	$          6,770	$      5,810	$       26,000

(a)

Account Titles	Debit	Credit
Raw Material Inventory	$            4,000
Accounts Payable		$         4,000
(Purchase of raw material)
Factory Payroll	$            7,000
Cash		$         7,000
(Labor costs incurred)
Manfacturing Overhead	$            1,400
Cash		$         1,400
(Overhead paid)
Work in Process Inventory	$            5,300
Manfacturing Overhead	$            1,500
Raw Material Inventory		$         6,800
(Issue of raw material)
Work in Process Inventory	$            5,000
Manfacturing Overhead	$            2,000
Factory Payroll		$         7,000
(Assignment of wages)
Work in Process Inventory	$            3,500
Manfacturing Overhead		$         3,500
(manufacturing overhead applied)
Finished Goods Inventory	$         20,190
Work in Process Inventory		$      20,190
(completion of jobs)
Accounts Receivable	$         36,000
Sales Revenue		$      36,000
(Sale of jobs)
Cost of Goods Sold	$         20,190
Finished Goods Inventory		$      20,190
(Cost of goods sold)

Work in Process Inventory
Beginning Balance	$         12,200
Direct Material	$            5,300	$      20,190	Finished Goods Inventory
Direct Labor	$            5,000
Manufacturing Overhead	$            3,500
Ending Balance	$            5,810

	Smith
Beginning Balance
Direct Material	$      1,900
Direct Labor	$      2,300
Manufacturing Overhead	$      1,610
Total	$      5,810