Question
In: Accounting
Please prepare journal entries for the following cost flows. (1). Sharon Company uses job-order costing system....
Please prepare journal entries for the following cost flows.
(1). Sharon Company uses job-order costing system. In July, direct labor cost incurred $90,000 and indirect labor cost incurred $80,000.
(2). Sharon Company Job costing $52,000 according to their job cost sheets were completed during July and transferred to Finished Goods.
(3). Sharon Company sold the $38,000 in Finished Goods Inventory to customers for $52,000 on account.
(4). Process Cost Flows: The Flow of Applied Manufacturing Overhead Costs. Applied manufacturing overhead cost: bottling Department $65,000; and labelling Department $45,000
(5). Process Cost Flows: Transferred incomplete bottle water from the Bottling Department to the Labelling Department: $850,000
Solutions
Expert Solution
(1) Dr. Work-in-process inventory (direct) $90,000
Dr. Manufacturing overhead (indirect) $80,000
Cr. Wages and salaries payable $170,000
(Direct and Indirect Labour cost incurred)
(2) Dr. Finished goods inventory $52,000
Cr. Work-in-process inventory $52,000
(Goods completed and transferred to finished goods)
(3) Dr. Accounts receivable $52,000
Cr. Sales $52,000
Dr. Cost of goods sold $38,000
Cr. Finished goods inventory $38,000
(Goods sold on account)
(4) Dr. Work-In-Progress Inventory: Bottling Department $65,000
Dr. Work-In-Progress Inventory: Labelling Department $45,000
Cr. Manufacturing Overhead $110,000
(Applied manufacturing overhead cost to both departments)
(5) Dr. Work-In-Progress Inventory: Labelling Department $850,000
Cr. Work-In-Progress Inventory: Bottling Department $850,000
(Transferred incomplete bottle water from Bottling to Labelling
Department)
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