Question

Journalize the following entries

January 2—Paid Pierce Properties $2,750.00 for January rent. Of this amount, 25% is for office facilities and 75% is for factory facilities.

January 2—Paid Owen’s Insurance $6,000.00 for prepaid insurance for the first quarter of the year.

January 4—Sold two ice cream systems to Day Dreamer’s Ice Cream. The estimated direct labor is $8,200.00. The estimated direct material is $3,350.00. The estimated indirect material is $350.00. Day Dreamer’s is to be billed in the amount of $20,925.00 on account. A check for $5,000.00 will be collected as a deposit against that sale. The start date will be January. The date promised will be January 23. Assign the contract to Job 74.

January 5—Mountain Swirl Ice Cream purchased and took delivery of one ice cream machine for $7,500.00. Record the sale and the cost of the sale. Markup is 150% of cost. Transfer cost from Finished Goods to COGS.

January 9—Assign the manufacture of one ice cream machine to Job 75. A direct material requisition shows $1,450.00 of direct materials, and an indirect materials requisition shows $170.00 of indirect materials. A time card shows $3,650.00 of direct labor for the completed job. Factory overhead is based on 25% of direct labor cost. Transfer the completed job from Direct Material and Indirect Material to the Finished Goods account. When making the journal entry for applying direct labor, debit Finished Goods for the gross pay and credit FWT Payable and FICA Tax Payable for the appropriate amounts with the net pay going to Salaries Payable.

Answer 1

Date	Particulars	Debit ($)	Credit ($)
Jan 2	Rent A/c	2750
	To bank/Cash A/c		2750
	(being rent Paid for the Month of january )
jan 2	Office Faciliies Expense A/c	687.50
	Factory Facilities Expenses A/c	2062.50
	To Rent A/c		2750
	(Being Rent Bifurcated into Office:Factory ate the Ratio of 25:75)
Jan 2	Prepaid Insurance A/c	6000.00
	To Bank/Cash A/c		6000.00
	(Being Prepaid Insuarnace booked for first Quarter paid to Owen Insurance)
Jan 4	Day Dreamer’s Ice Cream A/c	5000.00
	To Advance against Sale A/c		5000.00
	( Being Check of 5000.00 to be collected for advance against Sale)
Jan 5	Mountain Swirl Ice Cream A/c	7500.00
	To Sales A/c		7500.00
	(Being Debtor booked for sale of Ice Cream Machine)
	Cost of Goods Sold A/c	3000.00
	To Finished Goods A/c		3000.00
	(Being Transfer of Finshed goods to COGS i.e (7500/250 *100)
Jan 9	Fininshed Goods A/c	1620.00
	To Direct labour A/c		1450.00
	To Indirect Labour A/c		170.00
	(Being transfer of Direct and Indirect material to Finished Goods)
Jan 9	Finished Goods A/c	3650.00
	To Salaries payable A/c		xxx
	To FWT Payable A/c		xxx
	To FICA Tax payable A/c		xxx
	(Being Direct labour Cost Transferred to Finished Goods and booked Salaries Payable Net of FWT and FICA)

NOTE:- The Last Entry of Salary payable is not having amount because lack of Information for FWT and FICA Contribution.