Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials purchased on account, $210,000. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials). Accrued direct labor cost of $50,000 and indirect labor cost of $21,000. Depreciation recorded on factory equipment, $105,000. Other manufacturing overhead costs accrued during October, $129,000. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,300 machine-hours were used in October. Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods. Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 22% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000.

Complete this question by entering your answers in the tabs below.

• Required 1

Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Raw materials purchased on account, $210,000.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit a.

Record the raw materials issued to production, $189,000 ($151,200 direct materials and $37,800 indirect materials).

Record the entry for accrued direct labor cost incurred, $50,000; indirect labor cost incurred, $21,000.

Depreciation recorded on factory equipment, $105,000.

Other manufacturing overhead costs accrued during October, $129,000.

The company applies manufacturing overhead cost to production on the basis of $5 per machine-hour. A total of 76,300 machine-hours were recorded for October.

Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

Record the cost of goods sold.

Record the sales on account.

• Required 2

Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000.

	Manufacturing Overhead Work in Process Beg. Bal.          End. Bal. End. Bal.

Answer 1