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Journal entries; assigning costs to jobs; cost accumulation Ialani Corp. uses a job order costing system...

Journal entries; assigning costs to jobs; cost accumulation
Ialani Corp. uses a job order costing system for the yachts it constructs. On September 1, the company had the following account balances:

Raw Material Inventory $332,400
Work in Process Inventory 1,512,600
Cost of Goods Sold 4,864,000

On September 1, the three jobs in Work in Process Inventory had the following balances:

Job #75 $586,400
Job #78 266,600
Job #82 659,600

The following transactions occurred during September:
09-01 Purchased $1,940,000 of raw material on account.
09-04 Issued $1,900,000 of raw material as follows: Job #75, $289,600; Job #78 $252,600 ; Job #82, $992,200 ; Job #86, $312,400 ; and indirect material, $53,200
09-15 Prepared and paid the $757,000 factory payroll for September 1–15. Analysis of this payroll showed the following information:

Hours Dollars
Job #75 9,660 $84,600
Job #78 26,320 267,200
Job #82 20,300 203,000
Job #86 10,280 110,800
Indirect labor wages 91,400

09-15 On each payroll date, Ialani Corp. applies manufacturing overhead to jobs at a rate of $12.50 per direct labor hour.
09-15 Job #75 was completed, accepted by the customer, and billed at a selling price of cost plus 30 percent. Selling prices are rounded to the nearest whole dollar.
09-20 Paid the following monthly factory bills: utilities, $39,600 ; rent, $70,600 ; and accounts payable (accrued in August), $196,800.
09-24 Purchased raw material on account, $624,000.
09-25 Issued $716,400 of direct material as follows: Job #78, $154,800 ; Job #82, $212,600; Job #86, $349,000 ; indirect material issued was $55,800.
09-30 Recorded additional factory overhead costs as follows: depreciation, $809,000; expired prepaid insurance, $165,400 ; and accrued taxes and licenses, $232,400.
09-30 Recorded and paid the factory payroll for September 16–30 of $714,400. Analysis of the payroll follows:

Hours Dollars
Job #78 8,940 $177,400
Job #82 13,650 228,400
Job #86 9,980 243,600
Indirect labor wages 65,000

09-30 Applied overhead for the second half of the month to jobs.

b. Use T-accounts to post the information from the journal entries in (a) to the job cost subsidiary accounts and to general ledger accounts.

Raw Material Inventory
Bal. Answer 9/4 Answer
9/1 Answer 9/25 Answer
9/24 Answer
Answer
Answer
Answer
Answer
Bal. Answer
Work in Process Inventory
Bal. Answer 9/15 Answer
9/4 Answer
9/15 Answer
9/15 Answer
9/25 Answer
9/30 Answer
9/30 Answer
Bal. Answer
Cost of Goods Sold
Bal. Answer
Job 75 Answer
Answer
Answer
Answer
Answer
Answer
Bal. Answer
Job 75
Bal. Answer Completed Answer
DM Answer
DL Answer
OH Answer
Answer
Answer
Answer
Bal. Answer
Job 78
Bal. Answer Completed Answer
DM Answer
DL Answer
OH Answer
DM Answer
DL Answer
OH Answer
Bal. Answer
Job 82
Bal. Answer Completed Answer
DM Answer
DL Answer
OH Answer
DM Answer
DL Answer
OH Answer
Bal. Answer
Job 86
DM Answer Completed Answer
DL Answer
OH Answer
DM Answer
DL Answer
OH Answer
Bal. Answer

c. Reconcile the September 30 balances in the subsidiary ledger with the Work in Process Inventory account in the general ledger.

Schedule of Job Cost Records
September 30
Job #78
Job #82
Job #86
Total

d. Determine the amount of underapplied or overapplied overhead for September.
Note: Do not use a negative sign with your answer.

$Answer

AnswerUnderapplied OHOverapplied OHNeither under- or overapplied OH

Solutions

Expert Solution

Answer :

a.

9/1     

Raw Material Inventory   1,940,000

Accounts Payable                                                       1,940,000

9/4     

Work in Process Inventory         1,846,800

Manufacturing Overhead                                     53,200

Raw Material Inventory                                              1,900,000

Issuances made to jobs as follows:

#75, $289,600; #78, $252,600; #82, $992,200; #86, $312,400

9/15     

Work in Process Inventory     665,600

Manufacturing Overhead                                  91,400

Cash                                                                              757,000

Labor charged to jobs as follows:

#75, $84,600; #78, $267,200; #82, $203,000; #86, $110,800

9/15     

Work in Process Inventory     832,000

Manufacturing Overhead                                                        832,000

Overhead applied to jobs as follows:

#75, $120,750; #78, $329,000; #82, $253,750;

#86, $128,500.

9/15     

Finished Goods Inventory   1,081,350

Work in Process Inventory                                         1,081,350

($586,400 + $289,600 + $84,600 + $120,750)

Accounts Receivable                                      1,405,755

Sales                                                                            1,405,755

($1,081,350 x 1.3)

Cost of Goods Sold                                        1,081,350

Finished Goods Inventory                                          1,081,350

9/20     

Manufacturing Overhead   110,200

Accounts Payable                                           196,800

Cash                                                                               307,000

9/24     

Raw Material Inventory   624,000

Accounts Payable                                                          624,000

9/25     

Work in Process Inventory     716,400

Manufacturing Overhead                                  55,800

Raw Material Inventory                                                 772,200

Issuances made to jobs as follows:

#78, $154,800; #82, $212,600; #86, $349,000

9/30     

Manufacturing Overhead   1,206,800

Accumulated Depreciation                                         809,000

Prepaid Insurance                                                       165,400

Taxes & Licenses Payable                                           232,400

9/30     

Work in Process Inventory       649,400

Manufacturing Overhead                                     65,000

Cash                                                                            714,400

Labor charged to jobs as follows:

#78, $177,400; #82, $228,400; #86, $243,600

9/30     

Work in Process Inventory       407,125

Manufacturing Overhead                                            407,125

To apply overhead to jobs as follows:

#78, $111,750; #82, $170,625; #86, $124,750

b.

                      

                   

c.        

Schedule of Job Cost Records

September 30,

Job #78                                                            $1,559,350     

Job #82                                                              2,720,175

Job #86                                                              1,269,050

Total                                                                $5,548,575

d.         

Actual overhead for September

9/4 $                                                    53,200

9/15                                                     91,400

9/20                                                   110,200

9/25                                                     55,800

9/30                                                1,206,800

9/30                                                     65,000             $1,582,400

Applied overhead for September

9/15                                                     $832,000

9/30                                                      407,125           (1,239,125)

Underapplied overhead                                                  $343,275

ekkarill92 answered 1 year ago
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