Question

Job Order Costing

The ABC Company builds residential housing. The company started operations on June 1^st, 2018. Below are transactions that occurred in the first month of operations (June 2018)

Journal Entries:

June 1) ABC Company sold common stock for $1,500,000 in cash. The company issued 15,000 shares of $100 Par stock.

June 2) ABC Company purchased $300,000 of building materials. Paying $100,000 cash and the rest on account due in 45 days. No credit terms were given.

June 3) ABC Company purchased construction equipment for $240,000 cash. The company uses the straight line method of depreciation. The equipment has a useful life of 9 years and a residual value of $24,000.

June 4) ABC Company started construction on 3 homes (Job 100, 101, 102) by requisitioning the following materials: The materials were delivered to the job sites.

Job Number	Direct Materials	Indirect Materials
100	$50,000	$2,000
101	$30,000	$1,000
102	$25,000	$1,500

June 14) The following direct labor was used and paid for during the period ($30/hour):

Job Number	Amount	Hours
100	$33,000	1100
101	$27,000	900
102	$22,500	750

Predetermined overhead rate calculated May 8, 2018

(Estimated Total Overhead Costs) / (Estimated Direct Labor Hours)

($24,000) / (3000 hours) = $7 per direct labor used

June 21) Job 100 is completed and ready for sale.

The following actual costs were incurred and paid (Except for depreciation transactions listed below) during the month of June:

June 2) Insurance on houses under construction $2,000 (covers up to any number of homes.

June 3) Insurance on anticipated completed homes $500 no matter the number.

June 8) Construction supervisor salary $6,000 (Paid Monthly)

June 8) Company president salary $8,000 (Paid Monthly)

June 8) Administrative staff salaries $3,000 (Paid Monthly)

June 12) Building Permits $3,000

June 15) Fuel for construction equipment $1,500

June 15) Purchased land for $50,000 and a building for $112,000 to use as corporate HQ

June 20) Insurance on HQ is $1,000 per month

June 23) Declared a $5,000 cash dividend to be paid on July 23, 2018.

June 24) Job 100 is sold for $250,000; Cash $150,000 & $100,000 note receivable to be received on September 19, 2018. The amount received will be $109,000 principal and interest. The note is a 360 day (One year is 360 days) 9% simple interest note. An adjusting entry must be made for interest revenue earned for the month of June.

June 30) Depreciation for June on HQ Building $2,500

June 30) Depreciation on the construction equipment was _______________

June 30) Apply (Appropriate) overhead to incomplete jobs

June 30) Account for ending balance in Overhead account

Note: All June 30 entries are Adjusting Entries

ABC

Company
General journal for the month of june 2018
Date	Account Title	Debit	Credit
June.1	Cash	$ 1,500,000.00	?
?	Common Stock	?	$ 1,500,000.00
?	(Issue of 15,000 shares of $100 par stock)	?	?
June.2	Building Materials	$   300,000.00	?
?	Cash	?	$   100,000.00
?	Account Payable	?	$   200,000.00
?	(purchase of Building Materials for cash and on account)	?	?
June.2	Works Overhead	$      2,000.00	?
?	Cash	?	$      2,000.00
?	(insurance premium paid)	?	?
June.3	Construction Equipment	$   240,000.00	?
?	Cash	?	$   240,000.00
?	(Purchase of construction equipment for cash)	?	?
June.3	Prepaid Insurance	$        500.00	?
?	Cash	?	$        500.00
?	(insurance premium paid)	?	?
June.4	Work-in-process - Job#100	$     50,000.00	?
?	Work-in-process - Job#101	$     30,000.00	?
?	Work-in-process - Job#102	$     25,000.00	?
?	Works Overhead	$      4,500.00	?
?	Building Materials	?	$   109,500.00
?	(Building Materials issued for construction)	?	?
June.8	Works Overhead	$      6,000.00	?
?	Cash	?	$      6,000.00
?	(Construction supervisor salary)	?	?
June.8	Sales and Administration Expense	$     11,000.00	?
?	Cash	?	$     11,000.00
?	(President's and administrative staff salaries)	?	?
June.12	Works Overhead	$      3,000.00	?
?	Cash	?	$      3,000.00
?	(Building permit )	?	?
June.14	Work-in-process - Job#100	$     33,000.00	?
?	Work-in-process - Job#101	$     27,000.00	?
?	Work-in-process - Job#102	$     22,500.00	?
?	Cash	?	$     82,500.00
?	(Wages paid for direct labor)	?	?
June.15	Works Overhead	$      1,500.00	?
?	Cash	?	$      1,500.00
?	Land	$     50,000.00	?
?	Building	$   112,000.00	?
?	Cash	?	$   162,000.00
?	(Purchase of land and building for office)	?	?
June.20	Insurance Expense	$      1,000.00	?
?	Cash	?	$      1,000.00
?	(Insurance premium on headquarter)	?	?
June.21	Work-in-process - Job#100	$      7,700.00	?
?	Works Overhead	?	$      7,700.00
?	(Overhead applied at $7 per direct labor hour to Job#100)	?	?
June.21	Jobs Completed	$     90,700.00	?
?	Work-in-process - Job#100	?	$     90,700.00
?	(Cost of job#100 transferred to jobs completed account)	?	?
June.23	Retained Earnings	$      5,000.00	?
?	Dividend Payable	?	$      5,000.00
?	(Declaration of dividend )	?	?
June.24	Cash	$   150,000.00	?
?	Note Receivable	$   100,000.00	?
?	Sales Revenue	?	$   250,000.00
?	(Sale of Job#100 building)	?	?
?	Cost of jobs sold	$     90,700.00	?
?	Jobs Completed	?	$     90,700.00
?	(Cost of job#100 sold transferred to cost of jobs sold)	?	?
?	?	?	?
Adjusting Journal Entries
June.30	Depreciation Expense	$      2,500.00	?
?	Accumulated Depreciation - HQ building	?	$      2,500.00
?	(Depreciation expense on HQ building recorded)	?	?
June.30	Works Overhead	$      2,000.00	?
?	Accumulated Depreciation - Construction Equipment	?	$      2,000.00
?	(Depreciation expense on construction equipment)	?	?
June.30	Work-in-process - Job#101	$      6,300.00	?
?	Work-in-process - Job#102	$      5,250.00	?
?	Works Overhead	?	$     11,550.00
?	(Overhead applied at $7 per direct labor hour for Jobs #101 and 102)	?	?
June.30	Works Overhead	$      3,250.00	?
?	Cost of Jobs Sold	?	$      3,250.00
?	(Overapplied overhead adjusted)	?	?
June.30	Interest Receivable	$        750.00	?
?	Interest Revenue	?	$        750.00
?	(Interest on note receivable at 9% for June recorded)	?	?

1. Prepare T Account

2. Based on the T Account build

a) Unadjusted Trial Balance,

b) Adjusted Trial Balance

c) Financial Statements

d) Worksheets (Three Trial Balances)

Show in an excel format, please. Thank you.

Answer 1

Cash					Common Stock
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.1	1500000	Jun.2	100000				Jun.1	1500000
Jun.24	150000	Jun.2	2000
		Jun.3	240000
		Jun.3	500		Accounts Payable
		Jun.8	6000		Date	Debit	Date	Credit
		Jun.8	11000				Jun.2	200000
		Jun.12	3000
		Jun.14	82500
		Jun.15	1500		Construction Equipment
		Jun.15	162000		Date	Debit	Date	Credit
		Jun.20	1000		Jun.3	240000
	1650000		609500
End.Bal.	1040500
Building material					Works Overhead
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.2	300000	Jun.4	109500		Jun.2	2000	Jun.21	7700
	300000		109500		Jun.4	4500
End.Bal.	190500				Jun.8	6000
					Jun.12	3000
Prepaid insurance					Jun.15	1500
Date	Debit	Date	Credit			17000		7700
Jun.3	500					9300
Work-in-process - Job#100					Work-in-process - Job#101
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.4	50000	Jun.21	90700		Jun.4	30000
Jun.14	33000	Jun.30			Jun.14	27000
Jun.21	7700					57000		0
	90700		90700		End.Bal.	57000
Work-in-process - Job#102					Sales and administration Exp.
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.4	25000				Jun.8	11000
Jun.14	22500
	47500		0			11000		0
End.Bal.	47500				End.Bal.	11000
Land					Building
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.15	50000				Jun.15	112000
	50000		0			112000		0
End.Bal.	50000				End.Bal.	112000
Insurance Expense					Jobs Completed
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.20	1000				Jun.21	90700	Jun.24	90700
Retained Earnings					Note Receivable
Date	Debit	Date	Credit		Date	Debit	Date	Credit
Jun.23	5000				Jun.24	100000
Dividend Payable					Cost of jobs sold
Date	Debit	Date	Credit		Date	Debit	Date	Credit
		Jun.23	5000		Jun.24	90700
Sales revenue
Date	Debit	Date	Credit
		Jun.24	250000

ABC COMPANY
Trial balance worksheet
Account	Unadjusted
	Deibt	Credit
Cash	1040500
Building Materials	190500
Prepaid insurance	500
Note Receivable	100000
Work-in-process - Job #100
Work-in-process - Job #101	57000
Work-in-process - Job #102	47500
Jobs Completed
Construction Equipment	240000
Accumulated Depreciation - Construction equipment
Land	50000
Building	112000
Accumulated Depreciation -Building
Accounts Payable		200000
Dividend Payable		5000
Common stock		1500000
Retained Earnings	5000
Sales		250000
Cost of jobs sold	90700
Works Overhead	9300
Sales and administration expense	11000
Insurance Expense	1000
Depreciation Expense
Total	1955000	1955000

ABC COMPANY
Trial balance worksheet
Account	Adjusted		Income Statement		Balance Sheet
	Deibt	Credit	Deibt	Credit	Deibt	Credit
Cash	1040500				1040500
Building Materials	190500				190500
Prepaid insurance	500				500
Note Receivable	100000				100000
Work-in-process - Job #100	0				0
Work-in-process - Job #101	63300				63300
Work-in-process - Job #102	52750				52750
Jobs Completed	0				0
Construction Equipment	240000				240000
Accumulated Depreciation - Construction equipment		2000				2000
Land	50000				50000
Building	112000				112000
Accumulated Depreciation -Building		2500				2500
Accounts Payable		200000				200000
Dividend Payable		5000				5000
Common stock		1500000				1500000
Retained Earnings	5000					140050
Sales		250000		250000
Cost of jobs sold	90450		90450
Works Overhead	0		0
Sales and administration expense	11000		11000
Insurance Expense	1000		1000
Depreciation Expense	2500		2500
Income Summary			145050
Total	1959500	1959500	250000	250000	1849550	1849550

ABC COMPANY
Income statement
Sales	250000
Expenses:
Cost of jobs sold	90450
Sales and administration expense	11000
Insurance Expense	1000
Depreciation Expense	2500
Total Expenses	104950
Net income	145050
ABC COMPANY
Balance Sheet
Assets
Cash		1040500
Building Materials		190500
Prepaid insurance		500
Note Receivable		100000
Work-in-process - Job #101		63300
Work-in-process - Job #102		52750
Total Current Assets		1447550
Land		50000
Construction Equipment	240000
Accumulated Depreciation - Construction equipment	2000	238000
Building	112000
Accumulated Depreciation -Building	2500	109500
Total Assets		1845050
Liabilities and stockholders' equity
Accounts Payable		200000
Dividend Payable		5000
Total liabilities		205000
Common stock		1500000
Retained Earnings
Net Income	145050
Less: Dividends	5000
Retained earnings, June 30		140050
Total Stockholders' Equity		1640050
Total liabilities and stockholders' equity		1845050