In: Accounting
Marcelino Co.'s March 31 inventory of raw materials is $90,000.
Raw materials purchases in April are $500,000, and factory payroll
cost in April is $385,000. Overhead costs incurred in April are:
indirect materials, $52,000; indirect labor, $26,000; factory rent,
$38,000; factory utilities, $24,000; and factory equipment
depreciation, $56,000. The predetermined overhead rate is 50% of
direct labor cost. Job 306 is sold for $660,000 cash in April.
Costs of the three jobs worked on in April follow.
Job 306 | Job 307 | Job 308 | ||||||||||
Balances on March 31 | ||||||||||||
Direct materials | $ | 30,000 | $ | 39,000 | ||||||||
Direct labor | 24,000 | 16,000 | ||||||||||
Applied overhead | 12,000 | 8,000 | ||||||||||
Costs during April | ||||||||||||
Direct materials | 131,000 | 200,000 | $ | 100,000 | ||||||||
Direct labor | 104,000 | 154,000 | 101,000 | |||||||||
Applied overhead | ? | ? | ? | |||||||||
Status on April 30 | Finished (sold) | Finished (unsold) | In process | |||||||||
2. Prepare journal entries for the month of April
to record the above transactions.
S.no | General Journal | Debit | Credit | |
1 | a | Raw Materials Inventory | 500000 | |
Accounts payable | 500000 | |||
2 | b | Work in Process Inventory | 431000 | |
Raw Materials Inventory | 431000 | |||
(131000+200000+100000) | ||||
3 | c | Work in Process Inventory | 359000 | |
Cash | 359000 | |||
104000+154000+101000 | ||||
4 | d | Factory overhead | 26000 | |
Cash | 26000 | |||
5 | e | Work in Process Inventory | 179500 | |
Factory overhead | 179500 | |||
359000*50% | ||||
6 | f(1) | Factory overhead | 52000 | |
Raw Materials Inventory | 52000 | |||
7 | f(2) | Factory overhead | 24000 | |
Cash | 24000 | |||
8 | f(3) | Factory overhead | 56000 | |
Accumulated Depreciation- factory equipment | 56000 | |||
9 | f(4) | Factory overhead | 38000 | |
Cash | 38000 | |||
10 | g | Finished goods inventory | 847000 | |
Work in progress inventory | 847000 | |||
(30000+24000+12000+131000+104000+52000)+ (39000+16000+8000+200000+154000+77000) |
||||
11 | h | Cost of goods sold | 353000 | |
Finished goods inventory | 353000 | |||
12 | i | Cash | 660000 | |
Sales | 660000 | |||
13 | j | Cost of goods sold | 16500 | |
Factory Over head | 16500 | |||
(179500-52000-26000-38000-24000-56000) |