Question

Old School Publishing Inc. began printing operations on January 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303 and 304 are still in process at the end of the month, and all applicable costs except factory overhead have been recorded on the related cost sheets. In addition to the materials and labor charged directly to the jobs, $7,000 of indirect materials and $11,200 of indirect labor were used during the month. The cost sheets for the four jobs entering production during the month are as follows, in summary form: Job 301 Job 302 Direct materials $10,200 Direct materials $21,000 Direct labor 8,000 Direct labor 15,400 Factory overhead 6,080 Factory overhead 11,704 Total $24,280 Total $48,104

Journalize the Jan. 31 summary entries to record each of the following operations for January (one entry for each operation). Refer to the Chart of Accounts for exact wording of account titles. a. Direct and indirect materials used. b. Direct and indirect labor used. c. Factory overhead applied to all four jobs (a single overhead rate is used based on direct labor cost). d. Completion of Jobs 301 and 302.

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10

CHART OF ACCOUNTS Old School Publishing 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	Factory
192	Accumulated Depreciation-Factory

	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

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expenses
532	Insurance Expense
533	Utilities Expense
534	Office Supplies Expense
540	Administrative Expenses
560	Depreciation Expense-Factory
590	Miscellaneous Expense
710	Interest Expense

Answer 1

Event	Account Titles and Explanations	Debit	Credit
a)	Work in process inventory	$ 68,400
	Factory overhead	$ 7,000
	Raw materials inventory		$ 75,400
	(To record the Direct and indirect materials used )
b)	Work in process inventory	$ 53,600
	Factory overhead	$ 11,200
	Factory wages payable		$ 64,800
	(To record the Direct and indirect labor used )
c)	Work in process inventory	$ 40,736
	Factory overhead		$ 40,736
	(To record the Factory overhead applied )
d)	Finished goods inventpry ( $ 24,280 + $ 48,104)	$ 72,384
	Work in process inventory		$ 72,384
	(To record the Completion of Jobs )

Workings :
	Job 301	Job 302	Job 303	Job 304
Direct materials	$ 10,200	$ 21,000	$ 23,000	$ 14,200	$ 68,400
Direct labor	$ 8,000	$ 15,400	$ 18,000	$ 12,200	$ 53,600
Factory overhead	$ 6,080 ( $ 6,080 / $ 8,000 ) = 76%	$ 11,704 ( $ 15,400 x 76% )	$ 13,680 ( $ 18,000 x 76% )	$ 9,272 ( $ 12,200 x 76% )	$ 40,736
Total	$ 24,280	$ 48,104	$ 54,680	$ 35,672	$ 162,736