Question

Question: 3. Post The Journal entries for the transactions of the following T-accounts, each of which started the month with a zero balance.

Required information

Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

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.

1. Purchased raw materials on credit, $200,000.
2. Materials requisitions record use of the following materials for the month.

Job 136	$	48,000
Job 137		32,000
Job 138		19,200
Job 139		22,400
Job 140		6,400
Total direct materials		128,000
Indirect materials		19,500
Total materials used	$	147,500

3. Paid $15,000 cash to a computer consultant to reprogram factory equipment.
4. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,000
Job 137		10,500
Job 138		37,500
Job 139		39,000
Job 140		3,000
Total direct labor		102,000
Indirect labor		24,000
Total	$	126,000

5. Applied overhead to Jobs 136, 138, and 139.
6. Transferred Jobs 136, 138, and 139 to Finished Goods.
7. Sold Jobs 136 and 138 on credit at a total price of $525,000.
8. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	68,000
Depreciation of factory equipment		36,500
Expired factory insurance		10,000
Accrued property taxes payable		35,000

9. 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.

Problem 15-3A Part 3

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

Answer 1

Solution 3:

	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	$48,000.00	$32,000.00	$19,200.00	$22,400.00	$6,400.00
Labor	$12,000.00	$10,500.00	$37,500.00	$39,000.00	$3,000.00
Overhead	$24,000.00	$21,000.00	$75,000.00	$78,000.00	$6,000.00
Total cost	$84,000.00	$63,500.00	$131,700.00	$139,400.00	$15,400.00

Raw material Inventory
Event	Debit	Event	Credit
a	$200,000.00	b	$147,500.00
		Ending Balance	$52,500.00
Total	$200,000.00	Total	$200,000.00
Work In Process Inventory
Event	Debit	Event	Credit
b	$128,000.00	f	$355,100.00
d	$102,000.00	Ending Balance	$78,900.00
e	$177,000.00
i	$27,000.00
Total	$434,000.00	Total	$434,000.00
Finished Goods Inventory
Event	Debit	Event	Credit
f	$355,100.00	g	$215,700.00
		Ending Balance	$139,400.00
Total	$355,100.00	Total	$355,100.00
Cost of goods sold
Event	Debit	Event	Credit
g	$215,700.00	Ending balance	$215,700.00
Total	$215,700.00	Total	$215,700.00
Manufacturing Overhead
Event	Debit	Event	Credit
b	$19,500.00	e	$177,000.00
c	$15,000.00	i	$27,000.00
d	$24,000.00	Underapplied overhead	$4,000.00
h	$149,500.00
Total	$208,000.00	Total	$208,000.00