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Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

Purchased raw materials on credit, $220,000.

Materials requisitions record use of the following materials for the month.

Job 136	$	49,000
Job 137		33,500
Job 138		20,200
Job 139		22,800
Job 140		7,000
Total direct materials		132,500
Indirect materials		21,000
Total materials used	$	153,500

Paid $15,750 cash to a computer consultant to reprogram factory equipment.

Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,100
Job 137		10,700
Job 138		37,900
Job 139		39,600
Job 140		3,200
Total direct labor		103,500
Indirect labor		25,500
Total	$	129,000

Applied overhead to Jobs 136, 138, and 139.

Transferred Jobs 136, 138, and 139 to Finished Goods.

Sold Jobs 136 and 138 on credit at a total price of $545,000.

The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	70,000
Depreciation of factory equipment		38,000
Expired factory insurance		11,000
Accrued property taxes payable		35,500

Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

2. Prepare journal entries to record the events and transactions a through i.

Record raw material purchases on credit.

Note: Enter debits before credits.

	Transaction General Journal Debit Credit a.

Record the requisition of direct and indirect materials.

Note: Enter debits before credits.

Transaction General Journal Debit Credit b. Record payment to computer consultant to reprogram factory equipment. Note: Enter debits before credits. Transaction General Journal Debit Credit c. Record the entry for direct and indirect labor, paid in cash. Note: Enter debits before credits. Transaction General Journal Debit Credit d. Record the entry to apply overhead to jobs 136, 138 and 139. Note: Enter debits before credits. Transaction General Journal Debit Credit e. Record the transfer of completed jobs 136,138 and 139 to finished goods. Note: Enter debits before credits. Transaction General Journal Debit Credit f. Record the entry for sales on account for Jobs 136 and 138. Note: Enter debits before credits. Transaction General Journal Debit Credit g(1). Record the entry for the cost of sales of Jobs 136 and 138. Note: Enter debits before credits. Transaction General Journal Debit Credit g(2). Record other factory overhead (depreciation, insurance and property taxes). Note: Enter debits before credits. Transaction General Journal Debit Credit h. Record the entry to apply overhead to Jobs 137 and 140 (Work in Process). Note: Enter debits before credits. Transaction General Journal Debit Credit i.

Answer 1

		job 136	job 137	job138	job139	job140	total
Materials		49,000	33,500	20,200	22,800	7,000	132,500
labor		12,100	10,700	37,900	39,600	3,200	103,500
overhead		24,200	21400	75800	79200	6400	207,000
total		85,300	65,600	133,900	141,600	16,600	443,000
2)	TR	General Journal				Debit	Credit
	a)	Raw materials inventory				220,000
		Accounts payable					220,000
	b)	Work in process inventory				132,500
		Factory overhead				21,000
		Raw materials inventoy					153,500
	c)	Factory overhead				15,750
		cash					15,750
	d)	Work in process inventory				103,500
		Factory overhead				25,500
		Cash					129,000
	e)	Work in process overhead				179,200
		Factory overhead					179,200
	f)	finished goods inventory				360,800
		Work in process inventory					360,800
	g)	Accounts receivable				545,000
		Sales					545,000
		cost of goods sold				219,200
		finished goods inventory					219,200
	h)	Factory overhead				154,500
		Accumulated depreciation-factory building					70,000
		Accumulated depreciation-factory equipment					38,000
		prepaid insurance					11,000
		property taxes payable					35,500
	i)	work in process inventory				27,800
		Factory overhead					27,800