Question

Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:

	a. Materials purchased on account, $28,580.
	b. Materials requisitioned and factory labor used:

Job	Materials	Factory Labor
301	$3,030	$2,760
302	3,490	3,770
303	2,520	1,860
304	8,290	6,880
305	5,000	5,490
306	3,890	3,410
For general factory use	1,130	4,190

	c. Factory overhead costs incurred on account, $5,670.
	d. Depreciation of machinery and equipment, $2,050.
	e. The factory overhead rate is $52 per machine hour. Machine hours used:

Job	Machine Hours
301	27
302	38
303	28
304	73
305	38
306	27
Total	231

	f. Jobs completed: 301, 302, 303 and 305.
	g. Jobs were shipped and customers were billed as follows: Job 301, $8,340; Job 302, $10,880; Job 303, $15,310.

	Required:
1.	Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.
2.	Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.
3.	Prepare a schedule of unfinished jobs to support the balance in the work in process account.*
4.	Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.* *Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

CHART OF ACCOUNTS
Kurtz Fencing Inc.
General Ledger
ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Land 191 Machinery and Equipment 192 Accumulated Depreciation-Machinery and Equipment LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary	REVENUE 410 Sales 610 Interest Revenue

Amount Descriptions
Balance of Work in Process, January 30
Finished Goods, January 30 (Job 305)
Job No. 301
Job No. 302
Job No. 303
Job No. 304
Job No. 305
Job No. 306

1. Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

2. Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank.

Work in Process
Bal.

Finished Goods
Bal.

3. Prepare a schedule of unfinished jobs to support the balance in the work in process account. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

Kurtz Fencing Inc.

Schedule of Unfinished Jobs

1	Job	Direct Materials	Direct Labor	Factory Overhead	Total
2
3
4

4. Prepare a schedule of completed jobs on hand to support the balance in the finished goods account. Refer to the list of Amount Descriptions for the exact wording of the answer choices for text entries.

Kurtz Fencing Inc.

Schedule of Completed Jobs

1	Job	Direct Materials	Direct Labor	Factory Overhead	Total
2

Answer 1

Solution 1:

Job Cost Sheets
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
301	$3,030.00	$2,760.00	$1,404.00	$7,194.00
302	$3,490.00	$3,770.00	$1,976.00	$9,236.00
303	$2,520.00	$1,860.00	$1,456.00	$5,836.00
304	$8,290.00	$6,880.00	$3,796.00	$18,966.00
305	$5,000.00	$5,490.00	$1,976.00	$12,466.00
306	$3,890.00	$3,410.00	$1,404.00	$8,704.00
Total	$26,220.00	$24,170.00	$12,012.00	$62,402.00

Journal Entries - Kurtz Fencing Inc.
S. no.	Particulars	Debit	Credit
a	Raw material inventory Dr	$28,580.00
	To Accounts payable		$28,580.00
	(To record purchase of raw material on account)
b	Work in process inventory Dr	$50,390.00
	Manufacturing overehead Dr	$5,320.00
	To Raw materials inventory		$27,350.00
	To Factory Wages		$28,360.00
	(To record consumption of material and cost of labor incurred))
c	Manufacturing overehead Dr	$5,670.00
	To Accounts payable		$5,670.00
	(To record factory overhead incurred)
d	Manufacturing overehead Dr	$2,050.00
	To Depreciation - Machinery and Equipment		$2,050.00
	(To record depreciation on machinery and equipment)
e	Work in process inventory Dr	$12,012.00
	To Manufacturing overhead		$12,012.00
	(To apply manufacturing overhead on production)
f	Finished goods inventory Dr ($7,194 + $9,236 + $5,836 + $12,466)	$34,732.00
	To Work in process inventory		$34,732.00
	(To record completion of Job No 301, 302, 303 and 305)
g1	Accounts receivables Dr	$34,530.00
	To Sales Revenue		$34,530.00
	(To record sales of Job 301, 302 and 303)
g2	Cost of goods sold Dr	$22,266.00
	To Finished goods inventory		$22,266.00
	(To record cost of goods sold)

Solution 2:

Work In Process Account
Event	Debit	Event	Credit
b	$50,390.00	f	$34,732.00
e	$12,012.00
Ending Balance	$27,670.00

Finished goods inventory
Event	Debit	Event	Credit
f	$34,732.00	g	$22,266.00
Ending Balance	$12,466.00

Solution 3:

Schedule of Unfinished Jobs
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
304	$8,290.00	$6,880.00	$3,796.00	$18,966.00
306	$3,890.00	$3,410.00	$1,404.00	$8,704.00
Total	$12,180.00	$10,290.00	$5,200.00	$27,670.00

Solution 4:

Schedule of completed jobs on hand
Job No	Direct Material	Direct labor	Manufacturing overhead	Total
305	$5,000.00	$5,490.00	$1,976.00	$12,466.00
Total	$5,000.00	$5,490.00	$1,976.00	$12,466.00