Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

1. Raw materials purchased on account, $209,000.
2. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).
3. Accrued direct labor cost of $49,000 and indirect labor cost of $21,000.
4. Depreciation recorded on factory equipment, $106,000.
5. Other manufacturing overhead costs accrued during October, $130,000.
6. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,200 machine-hours were used in October.
7. Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
8. Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.

Complete this question by entering your answers in the tabs below.

• Required 1

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

Journal entry worksheet

Note: Enter debits before credits.

	Transaction General Journal Debit Credit a.                        b.                        c                        d.                         e.                         f.                         h.

• Required 2

Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.

	Manufacturing Overhead Work in Process Beg. Bal. End. Bal. End. Bal.

Answer 1

	Journal entries
	No	General journal				Debit	Credit
	a.	Raw materials				209,000
		accounts payable					209,000
	b.	Work in process inventory				152,800
		manufacturing overhead				38,200
		Raw materials					191,000
	c.	Work in process inventory				49,000
		manufacturing overhead				21,000
		Wages payable					70,000
	d.	Manufacturing overhead				106,000
		Accumulated depreciation					106,000
	e.	Manufacturing overhead				130,000
		Accounts payable					130,000
	f.	Work in process inventory				609600
		manufacturing overhead					609,600
		(76200*8)
	g.	Finished goods				511,000
		Work in process inventory					511,000
	h.	Cost of goods sold				448,000
		finished goods					448,000
		Accounts receivable				609280
		sales	(448000*136%)				609,280
		Manufacturing overhead
	b.	38,200	f.	609,600
	c.	21,000
	d.	106,000
	e.	130,000
			End bal	314,400
		Work In process inventory
	Beg bal	36,000	g.	511,000
	b.	152,800
	c.	49,000
	f.	609,600
	end bal	336,400