Question

The following activities took place in the work in process inventory account during April:

Beginning Balance $15,000

Direct Materials Used $120,000

Total manufacturing labor incurred in April was $162,500, 80% of this amount represented direct labor. The predetermined manufacturing overhead rate is 120% of direct labor cost. Actual manufacturing overhead costs for April amounted to $150,000.

Two jobs were completed with total costs of $120,000 and $85,000, respectively. They were sold on account for $265,000 and $155,000, respectively.

a) Compute the balance in work in process inventory on April 30.

b) Record the journal entry for direct materials used in April.

c) Record the journal entry for total manufacuring labor incurred in April.

d) Record the journal entry to allocate manufacturing labor to the appropriate accounts.

e) Record the journal entry for allocated manufacturing overhead for April.

f) Record the entry to move the completed juobs into finished goods inventory.

g) Record the entry to sell the two completed jobs on account.

Answer 1

Rreq a:
Balance in WIP on April 30:
beginning Balance			15000
Add: Current manufacturing cost
Material			120,000
Labour (162500*80%)			130000
OH (130,000*120%)			156000
Total Cost of goods			421000
Less: Cost f Goods completed			205000
Ending balancec in WIP			216000
Journal entry:
S.no.	Accounts title and explanation				Debit $	Credit $
b.	Work in Process Inventory Dr.				120,000
	Raw material inventory					120,000
c.	Factory Wages Dr.				162500
	Cash account					162500
d.	Work in process Inventory Dr.				130000
	Factory Overheads Account Dr.				32500
	Factory Wages					162500
e.	Work in Process Inventory Dr.				156000
	Factory Overheads					156000
f.	Finished Goods inventory Dr.				205000
	Work in process Inventory					205000
g.	Accounts receivable Dr.				420000
	Sales revenue					420000
	Cost of goods sold dr.				205000
	Finished Goods inventory					205000