Question

URGENT

Ateeq Generators is a manufacturer of power generating equipment for commercial and industrial use. It commenced business on December 1. Below is a list of transactions conducted during its first month of operations:       

Transaction		$
1	Materials were purchased on credit terms.	400,000
2	Direct material was issued for Job A (for the manufacture of mobile generators).	89,000
3	Direct material was issued for Job B (for the manufacture of diesel generators).	141,000
4	Direct material was issued for Job C (for the manufacture of portable generators).	28,000
5	Incurred direct labour cost on each of the jobs mentioned above as follows: job A, $9,000; job B, $11,000; job C, $5,000.
6	Manufacturing overhead was applied to the jobs. The overhead rate used is 300% of direct labour dollars.
7	Job A and Job C were completed and moved to the finished goods warehouse.
8	Job A was sold on credit terms for $200,000.
9	Actual manufacturing overhead incurred and paid for he month amounted to $78,000.
10	Manufacturing overhead was closed to Cost of Goods Sold.

                                                                                                                                    

a. Prepare the journal entries for the following transactions ONLY: [3 marks]

Transactions 2, 6, 7

b. Compute the Cost of Goods Manufactured (COGM) for the month ended December 31. [1 mark]

c. Compute the Cost of Goods Sold (COGS) for the month ended December 31. [1 mark]                        

d. Compute the inventory balances reported in the company’s Statement of Financial Position at December 31. [NO NEED TO ADJUST FOR UNDER- or OVER- APPLIED OVERHEADS] [3 marks]

Answer 1