Question

Josie Inc. has provided the following information for the year ended 20x8:

1. Purchased raw materials on account for $122,000.

2. Issued $114,900 in raw materials to production ($20,700 were not traceable to specific jobs).

3. Incurred $100,751 in direct labor costs (14,393 hours) and $61,100 in supervision costs (paid in cash).

4. Incurred the following additional manufacturing overhead costs: factory lease $22,100 (paid in cash); depreciation on equipment $18,300; custodial supplies $6,000 (paid in cash).

5. Incurred the following nonmanufacturing costs, both paid in cash: advertising $73,100; sales commissions $87,500.

6. Applied manufacturing overhead to jobs in process at a rate of $10 per direct labor hour.

7. Completed jobs costing a total of $344,200.

8. Sold jobs for $425,000 on account. The cost of the jobs was $340,300.

9. Closed the Manufacturing Overhead account balance.

Prepare the journal entries to record these transactions.(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal entry to record the transactions are as follows:

Transaction	General Journal	Debit	Credit
a	Raw Material	$122,000
	Accounts payable		$122,000
	[To record purchase of raw material on account]
b	Work in process inventory	$94,200		[$114,900-$20,700]
	Manufacturing Overhead	$20,700		Non traceable cost will be assigned to manufacturing overhead
	Raw material inventory		$114,900
	[ To record materials issued to production]
C	Work in process inventory	$100,751		Labor cost is work in process
	Manufacturing overhead	$61,100		Supervision cost will be assigned to m anufacturing OH
	Cash		$161,851
	[ To record Labor cost]
d	Manufacturing Overhead	$46,400
	Cash		$28,100	[$22,100+$6,000]
	Accumulated depreciation		$18,300
	[ To record Manufacturing OH paid in cash and accumulated depreciation]
e	Advertising expense	$73,100
	sales comission	$87,500
	Cash		$160,600
	[To record advertsing and selling expenses paid]
f	Work in process inventory	$143,930		[14,393 direct labor *$10]
	Manufacturing Overhead		$143,930
	[ To record manufacturing overhead applied to production]
g	finished goods inventory	$344,200
	work in process inventory		$344,200
	[ To record cost of goods completed transferred to finished goods]
h	Accounts receivables	$425,000
	Sales revenue		$425,000
	[To record sales on account]
	Cost of goods sold	$340,300
	Finished goods		$340,300
i	Manufacturing Overhead	$15,730
	Cost of good sold		$15,730
	[ To close t he over applied overhead]

Note i

overhead applied = $143,930 (f)

Actual overhead incurred = $20,700(b)+$61,100(c)+$46,400(d)

=$128,200

overapplied(under) Overhead= applied overhead-actual overhead

=$143,930-$128,200

=$15,730