Question

Munson Co. uses a job order cost system. The following data summarize the operations related to production for July:

July	1	Materials purchased on account, $630,520.
	2	Materials requisitioned, $669,000, of which $76,690 was for general factory use.
	31	Factory labor used, $644,620, of which $91,400 was indirect.
	31	Other costs incurred on account for factory overhead, $147,440; selling expenses, $238,240; and administrative expenses, $150,800.
	31	Prepaid expenses expired for factory overhead were $30,340; for selling expenses, $25,550; and for administrative expenses, $18,210.
	31	Depreciation of office building was $85,350; of office equipment, $45,280; and of factory equipment, $32,530.
	31	Factory overhead costs applied to jobs, $374,600.
	31	Jobs completed, $996,810.
	31	Cost of goods sold, $892,790.

	Required:
	Journalize the entries to record the summarized operations. Refer to the Chart of Accounts for exact wording of account titles. Journalize the entries to record the summarized operations. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Solution:

Journal Entries - Munson Co.
Date	Particulars	Debit	Credit
1-Jul	Raw materials inventory Dr	$630,520.00
	To Account payable		$630,520.00
	(To record purchase of material on account)
2-Jul	Work in process Dr	$592,310.00
	Manufacturing overhead Dr	$76,690.00
	To Raw materials inventory		$669,000.00
	(To record use of material)
31-Jul	Work in process Dr	$553,220.00
	Manufacturing overhead Dr	$91,400.00
	To Factory wages		$644,620.00
	(To record factory labor used)
31-Jul	Manufacturing overhead Dr	$147,440.00
	Selling expenses Dr	$238,240.00
	Administrative expenses Dr	$150,800.00
	To Account payable		$536,480.00
	(To record expenses incurred)
31-Jul	Manufacturing overhead Dr	$30,340.00
	Selling expenses Dr	$25,550.00
	Administrative expenses Dr	$18,210.00
	To Prepaid expenses		$74,100.00
	(To record prepaid expenses expired)
31-Jul	Depreciation expense Dr	$130,630.00
	Manufacturing overhead Dr	$32,530.00
	To Accumulated depreciation - Building		$85,350.00
	To Accumulated depreciation - Office equipment		$45,280.00
	To Accumulated depreciation - factory equipment		$32,530.00
	(To reocrd depreciation)
31-Jul	Work In Process Dr	$374,600.00
	To Manufacturing overhead		$374,600.00
	(To record overhead applied)
31-Jul	Finished goods inventory Dr	$996,810.00
	To Work In Process		$996,810.00
	(To record job completed)
31-Jul	Cost of goods sold Dr	$892,790.00
	To Finished goods inventory		$892,790.00
	(To record cost of goods sold)