Question

Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below.

1. $75,400 in raw materials were purchased for cash.
2. $72,800 in raw materials were used in production. Of this amount, $65,400 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $152,900 were incurred and paid. Of this amount, $133,200 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $126,000 were incurred and paid.
5. Manufacturing overhead of $126,100 was applied to production using the company’s predetermined overhead rate.
6. All of the jobs in process at the end of the month were completed.
7. All of the completed jobs were shipped to customers.
8. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts.
2. Determine the adjusted cost of goods sold for the period.

Answer 1

1.

Cash		Raw materials
Particulars	Debit	Credit	Particulars		Particulars	Debit	Credit	Particulars
Beg. Balance	$0				Beg. balance	$0
		$75,400	Raw materials purchases		Raw materials purchases	$75,400	$72,800	Material used
		$1,52,900	Labor Wages
		$1,26,000	Other Manufacturing overehad		End. balance	$2,600
End. Balance		$3,54,300
Work In Process		Finished Goods
Particulars	Debit	Credit	Particulars		Particulars	Debit	Credit	Particulars
Beg. Balance	$0				Beg. Balance	$0
Direct Materials	$65,400	$3,24,700	Completed Jobs		Completed Jobs	$3,24,700	$3,24,700	Cost of goods sold
Direct labor	$1,33,200
Manufacturing Overhead	$1,26,100				End. Balance	$0
End. Balance	$0
Manufacturing overhead		Cost of goods sold
Particulars	Debit	Credit	Particulars		Particulars	Debit	Credit	Particulars
Beg. Balance	$0				Beg. Balance	$0
Indirect Materials	$7,400	$1,26,100	Manufacturing Overhead applied		Finished goods	$3,24,700
Indirect labor	$19,700	$27,000	Cost of goods sold		Underapplied overhead	$27,000
Other Manufacturing overhead	$1,26,000
					End. Balance	$3,51,700
End. Balance	$0

2.

Adjusted cost of goods sold = $351,700