Question

Wildhorse Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2020, the general ledger for Wildhorse Inc. contains the following data.

Raw Materials Inventory		$4,400		Manufacturing Overhead Applied		$34,100
Work in Process Inventory		$5,550		Manufacturing Overhead Incurred		$34,300

Subsidiary data for Work in Process Inventory on June 1 are as follows.

Job Cost Sheets
		Customer Job
Cost Element		Rodgers		Stevens		Linton
Direct materials		$500		$900		$1,000
Direct labor		200		500		700
Manufacturing overhead		250		625		875
		$950		$2,025		$2,575

During June, raw materials purchased on account were $5,100, and all wages were paid. Additional overhead costs consisted of depreciation on equipment $800 and miscellaneous costs of $400 incurred on account.

A summary of materials requisition slips and time tickets for June shows the following.

Customer Job		Materials Requisition Slips		Time Tickets
Rodgers		$700		$700
Koss		2,100		700
Stevens		500		400
Linton		1,400		1,300
Rodgers		400		400
		5,100		3,500
General use		1,300		1,200
		$6,400		$4,700

Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $20,800. Each customer paid in full.

(a)

Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to production; and (3) completion of jobs and sale of goods. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer:

No	General Journal	Debit	Credit
1	Raw Materials Inventory	5,100
	Accounts Payable		5,100
	To record the purchase of raw materials
	Factory Labor	4,700
	Cash		4,700
	To record the factory labor costs incurred
	Manufacturing Overhead	1,200
	Accumulated Depreciation—Equipment		800
	Accounts Payable		400
	To record the manufacturing overhead costs incurred
2	Work in Process Inventory	5,100
	Manufacturing Overhead	1,300
	Raw Materials Inventory		6,400
	To record assignment of direct materials
	Work in Process Inventory	3,500
	Manufacturing Overhead	1,200
	Factory Labor		4,700
	To record assignment of direct labor
	Work in Process Inventory	4,375
	Manufacturing Overhead		4,375
	To record assignment of overhead to production
3	Finished Goods Inventory	14,850
	Work in Process Inventory		14,850
	To record completion of jobs
	Cash	20,800
	Sales		20,800
	To record sale
	Cost of Goods Sold	14,850
	Finished Goods Inventory		14,850
	To record the cost of goods sold

Calculation:

a.

(1) for purchase of raw materials, factory labor costs incurred, and manufacturing overhead costs incurred;

So first we need to record the purchase of raw materials. Raw materials purchased on account were $5,100. We need to debit the Raw Materials Inventory and credit the Accounts Payable as it is a credit purchase

Then we need to record the factory labor costs incurred. The summary of materials requisition slips and time tickets for June is provided. So we need to debit the Factory Labor wt the total of time tickets and credit the cash for paid labor.

Then we need to record the manufacturing overhead costs incurred. Additional overhead costs consisted of depreciation on equipment $800 and miscellaneous costs of $400 incurred on account. So we need to credi these account and hen debit the Manufacturing Overhead.

(2) assignment of direct materials, labor, and overhead to production

Here first we need to assign the direct materials to production. Then we need to debit the Work in Process Inventory with the total of summary of materials requisition slips and then debit the Manufacturing Overhead with the total of overhead from materials requisition slips and then credit the Raw Materials Inventory

Here we need to assign the direct labor to production. Then we need to debit the Work in Process Inventory with the total of summary of time tickets and then debit the Manufacturing Overhead with the total of overhead from time tickets and then credit the Factory Labor.

Here we need to we need to assign the Manufacturing Overhead to production.

Manufacturing Overhead = Predetermined overhead rate x Direct labor = 1.25 x 3,500 = 4,375

Then we need to debit the Work in Process and credit the Manufacturing Overhead

(3) completion of jobs and sale of goods.

Then weneed to find the total of ompleted jobs.

Job	Direct Materials	Direct Labor	Manufacturing Overhead (1.25 x Direct labor)	Total Costs
Rodgers	1,600	1,300	1,625	4,525
Stevens	1,400	900	1,125	3,425
Linton	2,400	2,000	2,500	6,900
				14,850

Then we need to ecord completion of jobs by debiting the Finished Goods Inventory and crediting the Work in Process Inventory. Then we need to record the sales, since cash comes in we need to debit the cash and credit the sales with Rodgers, Stevens, and Linton completedand sold total of $20,800. Then we need to record the Cost of Goods Sold by debit the account and crediting 14,850 to Finished Goods Inventory