Question

In: Accounting

1. Prepare a job cost sheet for each job worked on during the month. 2. Prepare...

1. Prepare a job cost sheet for each job worked on during the month.

2. Prepare journal entries to record the events and transactions a through i.

3. Post the journal entries for the transactions to the following T-accounts, each of which started the month with a zero balance.

4. Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Work in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold.

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

a. Purchased raw materials on credit, $260,000.

b. Materials requisitions record use of the following materials for the month.

Job 136 $ 48,500
Job 137 33,000
Job 138 19,400
Job 139 23,400
Job 140 6,600
Total direct materials

130,900
Indirect materials 20,500
Total materials used $ 151,400

c. Paid $16,000 cash to a computer consultant to reprogram factory equipment.

d. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136 $ 12,300
Job 137 10,600
Job 138 37,700
Job 139 39,400
Job 140 3,400
Total direct labor 103,400
Indirect labor 25,000
Total $ 128,400

e. Applied overhead to Jobs 136, 138, and 139.

f. Transferred Jobs 136, 138, and 139 to Finished Goods.

g. Sold Jobs 136 and 138 on credit at a total price of $540,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building $ 69,000
Depreciation of factory equipment 38,000
Expired factory insurance 11,000
Accrued property taxes payable 36,500

i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Solutions

Expert Solution

1.

Job.136
Details Debit Details Credit
Raw material 48500 Finished goods 85400
Direct labor 12300
Manufacturing overhead 24600
85400 85400
Job.137
Details Debit Details Credit
Raw material 33000
Direct labor 10600
Manufacturing overhead 21200
64800
Job.138
Details Debit Details Credit
Raw material 19400 Finished goods 132500
Direct labor 37700
Manufacturing overhead 75400
132500 132500
Job.139
Details Debit Details Credit
Raw material 23400 Finished goods 141600
Direct labor 39400
Manufacturing overhead 78800
141600 141600
Job.140
Details Debit Details Credit
Raw material 6600
Direct labor 3400
Manufacturing overhead 6800
16800

2.

General journal
Ref Account Title Debit Credit
a Raw material 260000
Accounts Payable 260000
(Purchase of raw material on account)
b Work-in-process 130900
Manufacturing Overhead 20500
Raw material 151400
(Raw materil issued for production)
c Manufacturing Overhead 16000
Cash 16000
(Factory equipment programming expenses)
d Work-in-process 103400
Manufacturing Overhead 25000
Wages Payable 128400
(Wages paid during the month)
e Work-in-process 178800
Manufacturing Overhead 178800
(Applied overhead to jobs. 136,138 and 139)
f Finished Goods 359500
Work-in-process 359500
(Transfer of jobs 136,138 and 139 to finished goods)
g Accounts Receivable 540000
Sales 540000
(Sale of jobs 136 and 138)
Cost of goods sold 217900
Finished Goods 217900
(Cost of jobs 136,138 and 139 recorded)
h Manufacturing Overhead 154500
Accumulated Depreciation - Building 69000
Accumulated Depreciation - Equipment 38000
Prepaid Insurance 11000
Property taxes payable 36500
(Manufacturing overhead incurred)
i Work-in-process 28000
Manufacturing Overhead 28000
(Applied overhead to jobs. 137 and 140)

3.

Raw material
Ref Debit Ref Credit
a 260000 b 130900
b 20500
c 103400
260000 254800
Balance 5200
Work-in-process
Ref Debit Ref Credit
b 130900 f 359500
c 103400
e 178800
i 28000
441100 359500
Balance 81600
Manufacturing overhead
Ref Debit Ref Credit
b 20500 e 178800
c 16000 i 28000
d 25000
h 154500
216000 206800
Finished Goods
Ref Debit Ref Credit
f 359500 g 217900
Bal. 141600
Cost of goods sold
Ref Debit Ref Credit
g 217900
Sales
Ref Debit Ref Credit
g 540000

4.

Balance in job cost sheets
Job 137 64800
Job 140 16800
Total 81600
Work-in-process
Ref Debit Ref Credit
b 130900 f 359500
c 103400
e 178800
i 28000
441100 359500
Balance 81600

Cost of goods sold

Cost of jobs 136,138 and 139
Job 136 85400
Job 138 132500
Job 139 141600
Cost of jobs completed 359500
Less: Cost of jobs sold
      Job 136 85400
      Job 138 132500
Cost of jobs sold 217900
Cost of goods sold
Ref Debit Ref Credit
g 217900
Finished Goods
Ref Debit Ref Credit
f 359500 g 217900
Bal. 141600

ekkarill92 answered 1 year ago
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