Question
In: Accounting
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the Year
Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end:
| Debit | Credit | |
| Direct Materials Price Variance | $13,750 | |
| Direct Materials Usage Variance | $1,130 | |
| Direct Labor Rate Variance | 850 | |
| Direct Labor Efficiency Variance | $13,000 | |
Unadjusted Cost of Goods Sold equals $1,600,000, unadjusted Work in Process equals $256,000, and unadjusted Finished Goods equals $230,000.
Required:
1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. Note: Close the variances with a debit balance first. If an amount box does not require an entry, leave it blank or enter "0".
| Close variances with debit balance | |||
| Close variances with credit balance |
What is the adjusted balance in Cost of Goods Sold after closing out the variances?
$
2. What if any ending balance in a variance account that exceeds $12,000 is considered material? (a) Close the immaterial variance accounts to Cost of Goods Sold. (b) Prorate the largest of the labor variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. (c) Prorate the largest of the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is $1,050,000, the prime cost in Work in Process is $162,800, and the prime cost in Finished Goods is $130,000. If an amount box does not require an entry, leave it blank or enter "0".
Note: Round all interim calculations to three decimal places, and round your final answers to the nearest dollar. Adjust credit entry for rounding to ensure debits equal credits in journal entry.
| (a) | |||
| (b) | |||
| (c) | |||
What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances?
| Adjusted balance | |
| Work in Process | $ |
| Finished Goods | $ |
| Cost of Goods Sold | $ |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$13,950
Direct Materials Usage Variance
$1,240
Direct Labor Rate Variance
850
Direct Labor Efficiency Variance
$13,000
Unadjusted Cost of Goods Sold equals $1,530,000, unadjusted Work
in Process equals $336,000, and unadjusted Finished Goods equals
$200,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$14,050
Direct Materials Usage Variance
$1,170
Direct Labor Rate Variance
890
Direct Labor Efficiency Variance
$12,520
Unadjusted Cost of Goods Sold equals $1,520,000, unadjusted Work
in Process equals $326,000, and unadjusted Finished Goods equals
$180,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$14,050
Direct Materials Usage Variance
$1,150
Direct Labor Rate Variance
870
Direct Labor Efficiency Variance
$12,520
Unadjusted Cost of Goods Sold equals $1,570,000, unadjusted Work
in Process equals $316,000, and unadjusted Finished Goods equals
$190,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$14,050
Direct Materials Usage Variance
$1,150
Direct Labor Rate Variance
870
Direct Labor Efficiency Variance
$12,520
Unadjusted Cost of Goods Sold equals $1,570,000, unadjusted Work
in Process equals $316,000, and unadjusted Finished Goods equals
$190,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$14,250
Direct Materials Usage Variance
$1,180
Direct Labor Rate Variance
820
Direct Labor Efficiency Variance
$12,460
Unadjusted Cost of Goods Sold equals $1,540,000, unadjusted Work
in Process equals $336,000, and unadjusted Finished Goods equals
$260,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$13,850
Direct Materials Usage Variance
$1,170
Direct Labor Rate Variance
830
Direct Labor Efficiency Variance
$12,580
Unadjusted Cost of Goods Sold equals $1,590,000, unadjusted Work
in Process equals $296,000, and unadjusted Finished Goods equals
$240,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$13,850
Direct Materials Usage Variance
$1,110
Direct Labor Rate Variance
830
Direct Labor Efficiency Variance
$12,700
Unadjusted Cost of Goods Sold equals $1,550,000, unadjusted Work
in Process equals $276,000, and unadjusted Finished Goods equals
$280,000.
Required:
1. Assume that the ending balances in the...
Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has...
Closing the Balances in The Variance Accounts at the End of the
Year
Yohan Company has the following balances in its direct materials
and direct labor variance accounts at year-end:
Debit
Credit
Direct Materials Price Variance
$13,450
Direct Materials Usage Variance
$1,150
Direct Labor Rate Variance
800
Direct Labor Efficiency Variance
$12,340
Unadjusted Cost of Goods Sold equals $1,520,000, unadjusted Work
in Process equals $286,000, and unadjusted Finished Goods equals
$270,000.
What if any ending balance in a
variance account...
A company has the following accounts and account balances at the end of its first year:...
A company has the following accounts and account balances at the
end of its first year:
Accounts payable, $4,000
Cash, $22,000
Common stock, Not given
Dividends, $4,000
Expenses, $17,000
Notes payable, $3,000
Prepaid insurance, $5,000
Revenues, $28,000
What is the balance of its common stock account at the end of the
first year?
Closing Entries On July 31, the close of the fiscal year, the balances of the accounts...
Closing Entries
On July 31, the close of the fiscal year, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a furniture wholesaler, are as follows:
Accumulated Depreciation—Building
$365,000
Inventory
$115,000
Administrative Expenses
440,000
Notes Payable
100,000
Building
810,000
Retained Earnings
455,000
Cash
78,000
Sales
1,437,000
Common Stock
75,000
Sales Tax Payable
4,500
Cost of Goods Sold
775,000
Selling Expenses
160,000
Dividends
15,000
Store Supplies
16,000
Interest Expense
6,000...
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