Question

Exercise 3-2 Prepare T-Accounts [LO3-2, LO3-4]

Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories.

$75,800 in raw materials were purchased for cash.

$71,600 in raw materials were used in production. Of this amount, $65,900 was for direct materials and the remainder was for indirect materials.

Total labor wages of $151,500 were incurred and paid. Of this amount, $133,200 was for direct labor and the remainder was for indirect labor.

Additional manufacturing overhead costs of $125,000 were incurred and paid.

Manufacturing overhead of $128,000 was applied to production using the company’s predetermined overhead rate.

All of the jobs in process at the end of the month were completed.

All of the completed jobs were shipped to customers.

Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

Post the above transactions to T-accounts.

Determine the adjusted cost of goods sold for the period.

Answer 1

Cash
Debit		Credit
Particulars	Amount	Particulars	Amount
		(a)	$        75,800
		c)	$     151,500
		(d)	$     125,000

Raw Material
Debit		Credit
Particulars	Amount	Particulars	Amount
(a)	$    75,800	(b)	$    71,600

Work in Process
Debit		Credit
Particulars	Amount	Particulars	Amount
(b)	$    65,900
c)	$ 133,200
e	$ 128,000	(f)	$ 327,100

Finished Goods Inventory
Debit		Credit
Particulars	Amount	Particulars	Amount
(f)	$ 327,100	(g)	$ 327,100

Manufacturing Overhead
Debit		Credit
Particulars	Amount	Particulars	Amount
(b)	$      5,700	e	$     128,000
c)	$    18,300
(d)	$ 125,000	(h)	$        21,000

Cost of Goods Sold
Debit		Credit
Particulars	Amount	Particulars	Amount
(g)	$ 327,100
(h)	$    21,000
		Ba;ance	$ 348,100

Adjusted Cost of Goods Sold = 327,100 + 21,000 = $ 348,100

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