Question

Required information

Problem 19-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

Purchased raw materials on credit, $200,000.

Materials requisitions record use of the following materials for the month.

Job 136	$	48,500
Job 137		33,000
Job 138		19,800
Job 139		22,800
Job 140		7,200
Total direct materials		131,300
Indirect materials		20,500
Total materials used	$	151,800

Paid $15,000 cash to a computer consultant to reprogram factory equipment.

Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,200
Job 137		10,600
Job 138		37,700
Job 139		39,200
Job 140		3,600
Total direct labor		103,300
Indirect labor		25,500
Total	$	128,800

Applied overhead to Jobs 136, 138, and 139.

Transferred Jobs 136, 138, and 139 to Finished Goods.

Sold Jobs 136 and 138 on credit at a total price of $535,000.

The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	68,000
Depreciation of factory equipment		38,500
Expired factory insurance		12,000
Accrued property taxes payable		35,000

Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

rev: 02_01_2017_QC_CS-77139

_{2. Prepare journal entries to record the events and transactions a through i.}

f. Record the transfer of completed jobs 136,138 and 139 to finished goods.

g1. Record the entry for sales on account for Jobs 136 and 138.

g2Record the entry for the cost of sales of Jobs 136 and 138.

h.Record other factory overhead (depreciation, insurance and property taxes).

i. Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).

Answer 1

		job 136	job 137	job138	job139	job140	total
Materials		48,500	33,000	19,800	22,800	7,200	131,300
labor		12,200	10,600	37,700	39,200	3,600	103,300
overhead		24,400	21200	75400	78400	7200	206,600
total		85,100	64,800	132,900	140,400	18,000	441,200
2)	TR	General Journal				Debit	Credit
	a)	Raw materials inventory				200,000
		Accounts payable					200,000
	b)	Work in process inventory				131,300
		Factory overhead				20,500
		Raw materials inventoy					151,800
	c)	Factory overhead				15,000
		cash					15,000
	d)	Work in process inventory				103,300
		Factory overhead				25,500
		Cash					128,800
	e)	Work in process overhead				178,200
		Factory overhead					178,200
	f)	finished goods inventory				358,400
		Work in process inventory					358,400
	g)	Accounts receivable				535,000
		Sales					535,000
		cost of goods sold				218,000
		finished goods inventory					218,000
	h)	Factory overhead				153,500
		Accumulated depreciation-factory building					68,000
		Accumulated depreciation-factory equipment					38,500
		prepaid insurance					12,000
		property taxes payable					35,000
	i)	work in process inventory				28,400
		Factory overhead					28,400
	T- Accounts
Raw materials inventory					Work in process inventory
a.	200,000				b.	131,300
		151,800	b.		d.	103,300
					e.	178,200
end bal	48,200						358,400	f.
					i.	28400
					bal	82,800
Factory overhead					finished goods inventory
b.	20,500				f.	358,400
c.	15,000						218,000	g.
d.	25,500				bal	140,400
		178,200	e.
h.	153,500
		28,400	i
bal	7,900
cost of goods sold
g.	218,000
end bal	218,000
Report of Job costs
Work in process inventory
job 137			64,800
job 140			18,000
Balance			82,800
finished goods inventory
job 139			140,400
Balance			140,400
cost of goods sold
job 136			85,100
job 138			132,900
balance			218,000