Question

The following data were taken from the records of Samsung Company for the  year ended December 31, 2019.
	Raw Materials Inventory,1/1/19	$48,000		Factory Machinery Depreciation		$16,000
	Raw Materials Inventory, 12/31/19	39,600		Factory Utilities		27,600
	Finished Goods Inventory, 1/1/19	96,000		Selling expenses		12,000
	Finished Goods Inventory, 12/31/19	75,900		Sales Revenue		534,000
	Work in Process Inventory, 1/1/19	19,800		Administrative expenses		14,200
	Work in Process Inventory, 12/31/19	18,600		Plant Manager's Salary		58,000
	Direct Labor	139,250		Factory Property Taxes		9,600
	Indirect Labor	24,460		Factory Repairs		1,400
	Accounts Receivable	27,000		Raw Materials Purchases		96,400
	Factory Insurance	4,600		Cash		32,000
	Manufacturing overhead applied	145,000
Instructions
(a)	Prepare a cost of goods manufactured schedule.
(b)	Prepare a cost of goods sold schedule.
(c)	Prepare an income statement. The tax rate is 25%.
(d)	Calculate under or over applied overhead, showing your calculations
(e)	Prepare the entry to close MOH to COGS

Answer 1

(a)

Schedule of Cost of Goods manufactured
Direct Materials
Raw Material, Beginning Inventory	$           48,000
Add: Purchases	$           96,400
Total Raw Material Available	$         144,400
Deduct : Raw Material in inventory, ending	$           39,600
Raw Material used in production		$         104,800
Direct Labor		$         139,250
Manufacturing Overhead Applied		$         145,000
Total Manufacturing Costs		$         389,050
Add: Beginning Work in Process Inventory		$           96,000
		$         485,050
Deduct: Ending Work in Process Inventory		$           75,900
Cost of Goods Manufactured		$         409,150

(b)
Actual Overhead = $24460+4600+16000+27600+58000+9600+1400 = $141660

Schedule of Cost of Goods Sold
Finished Goods Inventory, Beginning	$           96,000
Add: Cost of Goods Manufactured	$         409,150
Cost of Goods Available for sale	$         505,150
Deduct : Finished Goods Inventory, Ending	$           75,900
Unadjusted Cost of goods sold	$         429,250
Overapplied Overhead	$            (3,340)
Adjusted Cost of goods sold	$         425,910

(c)

Income Statement
Net Sales Revenue		$         534,000
Cost of Goods Sold		$         425,910
Gross Profit		$         108,090
Operating Expenses
Selling Expenses	$           12,000
Administrative Expenses	$           14,200	$           26,200
Income before Income Tax		$           81,890
Income Tax Expense		$           20,473
Net Income		$           61,417

(d)
Overapplied Overhead = $141660 - 145000 = ($3340)

(e)

Account Titles	Debit	Credit
Manufacturing Overhead	$             3,340
Cost of Goods Sold		$             3,340