Question

Swifty Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team’s uniform is unique in color and design, Swifty uses a job order costing system. On January 1, the T-accounts for some of Swifty’s primary balance sheet accounts were as follows:

Raw Materials Inventory								Work in Process Inventory
Beg.		18,200						Beg.		30,700

Finished Goods Inventory								Cash
Beg.		22,000						Beg.		36,400

Accounts Receivable								Accounts Payable
Beg.		72,700										Beg.		42,800

During the year, the following events occurred:

1.	Swifty purchased raw materials costing $85,100 on account.
2.	Swifty used $93,000 of raw materials in production. Of these, 70% were classified as direct materials and 30% as indirect materials. (Swifty maintains a single Raw Materials Inventory account.)
3.	Swifty used 38,800 hours of direct labor. The company’s average direct labor rate was $8 per hour (credit Wages Payable).
4.	The company’s only indirect labor cost was the salary of a security guard hired to watch the company’s shop after hours. The guard’s annual salary was $26,300 (credit Wages Payable).
5.	Other manufacturing overhead costs the company incurred on account totaled $71,400.
6.	Swifty applied $135,000 in manufacturing overhead.
7.	The company completed production of goods costing $326,000.
8.	The company’s Cost of Goods Sold balance was $303,750 before adjusting for over- or underapplied overhead.
9.	Sales revenue was $412,000 (all sales were made on account).
10.	Swifty collected $410,000 from customers.
11.	The company paid accounts payable of $110,000.
12.	At year-end, all wages earned during the year had been paid.

(a)

Record the transactions above in the appropriate T-accounts and calculate ending balances. (Post entries in order presented in the problem.)

Answer 1

Raw materials inventory
Event	Debit	Event	Credit
Beg.	$18,200	2	$93,000
1	$85,100	End	$10,300
Total	$103,300	Total	$103,300

.

Work In Process Inventory
Event	Debit	Event	Credit
Beg.	$30,700	7	$326,000
2	$65,100	End	$215,200
3	$310,400
6	$135,000
Total	$541,200.	Total	$541,200

.

Finished goods inventory
Event	Debit	Event	Credit
Beg.	$22,000	8	$303,750
7	$326,000	End	$44,250
Total	$348,000	Total	$348,000

.

Cost of goods sold
Event	Debit	Event	Credit
8	$303,750	End Bal	$303,750
Total	$303,750	Total	$303,750

.

Manufacturing overhead
Event	Debit	E]vent	Credit
2	$27,900	6	$135,000
4	$26,300
5	$71,400
End	$9,400
Total	$135,000	Total	$135,000

.

Sales Revenue
Event	Debit	Event	Credit
End	$412,000	9	$412,000
Total	$412,000	Total	$412,000

.

Cash
Event	Debit	Event	Credit
Beg	$36,400	11	$110,000
10	$410,000	12	$336,700
End	$300
Total	$446,700	Total	$446,700

Accounts Payable
Event	Debit	Event	Credit
11	$110,000	Beg	$42,800
End	$89,300	1	$85,100
		5	$71,400
Total	$199.300	Total	$199,300

.

Accounts Receivables
Event	Debit	Event	Credit
Beg	$72,700	10	$410,000
9	$412,000	End	$74,700
Total	$506,300	Total	$487,700

.

Wages Payable
Event	Debit	Event	Credit
12	$336,700	3	$310,400
		4	$26,300
Total	$336,700	Total	$336,700