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Prepare entries in a job order cost system and partial income statement. For the year ended...

Prepare entries in a job order cost system and partial income statement.

For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data.

Job Number Explanation Direct Materials Direct Labor Manufacturing Overhead Total Costs
7640 Balance 1/1 $25,000 $24,000 $28,800 $ 77,800
Current year's costs  30,000  36,000  43,200  109,200
7641 Balance 1/1  11,000  18,000  21,600   50,600
Current year's costs  43,000  48,000  57,600  148,600
7642 Current year's costs  58,000  55,000  66,000  179,00

Other data:1.Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.

2.Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.

3.Job No. 7640 and Job No. 7641 were completed during the year.

4.Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.

5.Manufacturing overhead incurred on account totaled $120,000.

6.Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000.

  Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs.

$179,000; Job 7642: $179,000

c.  Determine the gross profit to be reported for 2020.

$158,600

Solutions

Expert Solution

Work in Process Inventory
Beginning balance $128400 Completed jobs 386200
Direct materials 131000
Direct labor 139000
Manufacturing overhead 166800
Ending balance $179000

1) Beginning balance= Job No 7640+Job No 7641

= $77800+50600= $128400

2) Direct materials= Current year cost of Job No 7640+Current year cost of Job No 7641+Current year cost of Job No 7642

= $30000+43000+58000= $131000

3) Direct labor= Current year cost of Job No 7640+Current year cost of Job No 7641+Current year cost of Job No 7642

= $36000+48000+55000= $139000

4) Manufacturing overhead= Current year cost of Job No 7640+Current year cost of Job No 7641+Current year cost of Job No 7642

= $43200+57600+66000= $166800

5) Job No 7640= Beginning balance+Current year costs

= $77800+109200= $187000

Job No 7641= Beginning balance+Current year costs

= $50600+148600= $199200

Completed jobs= Job No 7640+Job No 7641

= $187000+199200= $386200

c) Actual manufacturing overhead= $120000+14000+18000+8000= $160000

Overapplied or underapplied overhead= Applied manufacturing overhead-Actual manufacturing overhead

= $166800-160000= $6800 overapplied

Job No 7641= Beginning balance+Current year costs

= $50600+148600= $199200

Unadjusted cost of goods sold= Job No. 7638+Job No. 7639+Job No. 7641

= $87000+92000+199200= $378200

Adjusted cost of goods sold= Unadjusted cost of goods sold-Overapplied overhead

= $378200-6800= $371400

Gross profit= Sales-Adjusted cost of goods sold

= $530000-371400= $158600

Gross profit $158600

ekkarill92 answered 2 years ago
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