Question

Journal Entries, T-Accounts

Kapoor Company uses job-order costing. During January, the following data were reported:

1. Materials purchased on account: direct materials, $99,500; indirect materials, $14,800.
2. Materials issued: direct materials, $81,500; indirect materials, $ 8,800.
3. Labor cost incurred: direct labor, $67,000; indirect labor, $18,750.
4. Other manufacturing costs incurred (all payables), $46,200.
5. Overhead is applied on the basis of 110 percent of direct labor cost.
6. Work finished and transferred to Finished Goods Inventory cost $235,700.
7. (1) Finished goods costing $218,000 were (2) sold on account for 150 percent of cost. Make the entry to record the cost of the jobs first, followed by the entry to record the revenue from their sale.
8. Any over- or underapplied overhead is closed to Cost of Goods Sold.

Required:

1. Prepare journal entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

2. Prepare a T-account for Overhead Control. Post the entries to the T-account in the same order in which they were journalized. If an amount is zero, enter "0". What is the ending balance in this account?

3. Prepare a T-account for Work-in-Process Inventory. Assume a beginning balance of $10,000, and post the entries to the T-account in the same order in which they were journalized.

Answer 1

Answer:-

sno#	Particulars	Debit ($)	Credit ($)
a	Raw Material Inventory A/c	Dr	114300
	To Accounts Payable A/c			114300
	(Being Raw Material Purchased)
b	Work in Process Inventory A/c	Dr	81500
	Over Head control A/c	Dr	8800
	To Raw Material Inventory A/c			90300
	(Being Raw material issued as direct & Indirect material)
c	Work In Process Inventory A/c	Dr	67000
	Overhead control A/c	Dr	18770
	To wages Payable A/c			85770
	(Being Wages charged to Work in Process & Overheads Account)
d	Over Head control Payable A/c	Dr	46200
	To Various Payable A/c			46200
	(Being Manufacturing Overheads Incurred for Production)
e	Work in Process Inventory A/c	Dr	73700
	To Over Head Control A/c			73700
	(Being Manufacturing Overhead applied during the month)
f	Finished Goods Inventory A/c	Dr	235700
	To Work in Process Inventory A/c			235700
	(Being Transferring completed goods to next process)
g(i)	COGS A/c	Dr	212000
	To Finished Goods Inventory A/c			212000
	(Being COGS transferred from finished goods)
g(ii)	Accounts Receivable A/c	Dr	296800
	To Sales Revenue			296800
	(Being goods sold on account)
h	COGS A/c	Dr	70
	To Overhead Control A/c			70
	(Being Under-applied overheads)

Over Head Control
Particulars	Amount	Particulars	Amount
Raw Material Inventory	8800	Work in Process	73700
Wages Payable	18770	Cost of Goods sold	70
Various Payable	46200
Work In Process Inventory
Particulars	Amount	Particulars	Amount
Balance	10000	Finished Goods Inventory	235700
Raw Material Inventory	81500
Wages Payable	67000
Over Head control	73700
		Balance	3500