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Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the...

Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the company’s production activities during May 2011 follows.

  

a. Purchased raw materials on credit, $260,000.
b. Paid $129,800 cash for factory wages.
c. Paid $15,750 cash to a computer consultant to reprogram factory equipment.
d. Materials requisitions record use of the following materials for the month.

  

  
  Job 136 $ 49,000
  Job 137 33,500
  Job 138 20,000
  Job 139 23,000
  Job 140 7,000
  
  Total direct materials 132,500
  Indirect materials 20,000
  
  Total materials used $ 152,500
  

  

e. Time tickets record use of the following labor for the month.

  

  
  Job 136 $ 12,100
  Job 137 10,800
  Job 138 37,700
  Job 139 39,200
  Job 140 3,000
  
  Total direct labor 102,800
  Indirect labor 27,000
  
  Total $ 129,800
  

  

f. Applied overhead to Jobs 136, 138, and 139.
g. Transferred Jobs 136, 138, and 139 to Finished Goods.
h. Sold Jobs 136 and 138 on credit at a total price of $530,000.
i.

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

  

  
  Depreciation of factory building $ 69,500
  Depreciation of factory equipment 37,500
  Expired factory insurance 11,000
  Accrued property tax payable 35,500

  

j.

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

25.

Required information

Required:
1.

Prepare a job cost sheet for each job worked on during the month. (Omit the "$" sign in your response.)

Job No. 136 Job No. 137 Job No. 138 Job No. 139 Job No. 140
  Materials $    $    $    $    $   
  Labor               
  Overhead               
  Total cost $    $    $    $    $   


26.

Required information

2.

Prepare journal entries to record the events and transactions a through j. (Omit the "$" sign in your response. )

General Journal Debit Credit
a.   (Click to select)Factory payrollFinished goods inventoryAccounts payableRaw materials inventoryFactory overheadAccounts receivableCost of goods soldCash     
       (Click to select)Cost of goods soldCashFactory overheadFactory payrollRaw materials inventoryAccounts payableAccounts receivableFinished goods inventory     
b.   (Click to select)Accounts receivableAccounts payableCashGoods in process inventoryFactory payrollFinished goods inventoryFactory overheadSales     
       (Click to select)Finished goods inventoryCashGoods in process inventoryFactory payrollSalesAccounts receivableAccounts payableFactory overhead     
c.   (Click to select)Prepaid insuranceProperty taxes payableGoods in process inventoryRaw materials inventoryFactory payrollFactory overheadAccounts receivableCash     
       (Click to select)CashProperty taxes payableAccounts receivablePrepaid insuranceFactory payrollGoods in process inventoryFactory overheadRaw materials inventory     
d.   (Click to select)Property taxes payableRaw materials inventoryFactory payrollAccounts payableCashFactory overheadGoods in process inventoryCost of goods sold     
  (Click to select)Factory payrollFactory overheadProperty taxes payableRaw materials inventoryGoods in process inventoryCashCost of goods soldAccounts payable     
       (Click to select)Property taxes payableRaw materials inventoryFactory payrollGoods in process inventoryAccounts payableCashCost of goods soldFactory overhead     
e.   (Click to select)Factory overheadRaw materials inventoryGoods in process inventoryCost of goods soldProperty taxes payablePrepaid insuranceFactory payrollFinished goods inventory     
  (Click to select)Factory payrollFinished goods inventoryCost of goods soldRaw materials inventoryProperty taxes payableFactory overheadPrepaid insuranceGoods in process inventory     
       (Click to select)Finished goods inventoryFactory payrollGoods in process inventoryFactory overheadProperty taxes payablePrepaid insuranceCost of goods soldRaw materials inventory     
f.   (Click to select)Cost of goods soldGoods in process inventoryFactory payrollFinished goods inventoryFactory overheadPrepaid insuranceSalesRaw materials inventory     
       (Click to select)Prepaid insuranceGoods in process inventoryFinished goods inventoryFactory payrollRaw materials inventorySalesCost of goods soldFactory overhead     
g.   (Click to select)Property taxes payableFactory payrollFactory overheadGoods in process inventoryCost of goods soldAccounts receivablePrepaid insuranceFinished goods inventory     
       (Click to select)Prepaid insuranceFactory PayrollFinished goods inventoryProperty taxes payableFactory overheadCost of goods soldGoods in process inventoryAccounts receivable     
h.   (Click to select)Prepaid insuranceGoods in process inventorySalesFinished goods inventoryFactory overheadFactory payrollAccounts receivableCost of goods sold     
       (Click to select)Factory payrollFactory overheadGoods in process inventoryCost of goods soldSalesFinished goods inventoryAccounts receivablePrepaid insurance     
  (Click to select)Raw materials inventoryFactory overheadCost of goods soldSalesCashFinished goods inventoryAccounts receivableFactory payroll     
       (Click to select)SalesCashRaw materials inventoryFactory payrollAccounts receivableFactory overheadFinished goods inventoryCost of goods sold     
i.   (Click to select)Property taxes payablePrepaid insuranceAccum. depreciation-factory buildingSalesAccum. Depreciation-factory equipmentFactory overheadGoods in process inventoryCost of goods sold     
       (Click to select)Accum. depreciation-factory buildingAccum. depreciation-factory equipmentGoods in process inventoryFactory overheadProperty taxes payablePrepaid insuranceSalesCost of goods sold     
       (Click to select)Factory overheadAccum. depreciation-factory equipmentPrepaid insuranceAccum. depreciation-factory buildingProperty taxes payableGoods in process inventoryCost of goods soldSales     
       (Click to select)Accum. depreciation-factory buildingPrepaid insuranceProperty taxes payableCost of goods soldGoods in process inventorySalesFactory overheadAccum. depreciation-factory equipment     
       (Click to select)Prepaid insuranceAccum. depreciation-factory buildingProperty taxes payableGoods in process inventorySalesFactory overheadCost of goods soldAccum. depreciation-factory equipment     
j.   (Click to select)Accounts receivableSalesGoods in process inventoryCashFinished goods inventoryFactory overheadFactory payrollRaw materials inventory     
       (Click to select)CashRaw materials inventoryFinished goods inventoryGoods in process inventoryAccounts receivableSalesFactory payrollFactory overhead     


27.

Required information

4.

Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Goods in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold. (Omit the "$" sign in your response.)

Reports of Job Costs
  Goods in Process Inventory
      (Click to select)Job 138Job 137Job 136Job 139 $   
      (Click to select)Job 140Job 138Job 139Job 136Job 137   
      Balance $   
  Finished Goods Inventory
      (Click to select)Job 140Job 139Job 137Job 138Job 136 $   
      Balance $   
  Cost of Goods Sold
      (Click to select)Job 136Job 140Job 137Job 139 $   
      (Click to select)Job 136Job 139Job 137Job 140Job 138   
      Balance $   

Solutions

Expert Solution

1.

Job Cost Sheet
Job No. 136 Job No. 137 Job No. 138 Job No. 139 Job No. 140
Materials 49000 33500 20000 23000 7000
Labor 12100 10800 37700 39200 3000
Overhead 24200 21600 75400 78400 6000
Total cost $ 85300 65900 133100 140600 16000

2.

Transaction General Journal Debit Credit
a. Raw materials inventory 260000
Accounts payable 260000
(To record raw materials purchased on credit)
b. Factory payroll 129800
Cash 129800
(To record payment of factory wages)
c. Factory overhead 15750
Cash 15750
(To record factory overheads paid)
d. Goods in process inventory 132500
Factory overhead 20000
Raw materials inventory 152500
(To record raw materials used)
e. Goods in process inventory 102800
Factory overhead 27000
Factory payroll 129800
(To record payment of factory payroll)
f. Goods in process inventory 178000
Factory overhead 178000
(To record factory overheads applied)
g. Finished goods inventory 359000
Goods in process inventory 359000
(To record jobs transferred to finished goods)
h. Accounts receivable 530000
Sales revenue 530000
(To record jobs sold on credit)
Cost of goods sold 218400
Finished goods inventory 218400
(To record cost of sales)
i. Factory overhead 153500
Accumulated depreciation-factory building 69500
Accumulated depreciation-factory equipment 37500
Prepaid insurance 11000
Property taxes payable 35500
(To record factory overheads incurred)
j. Goods in process inventory 81900
Factory overhead 81900
(To record factory overheads applied)

3.

Report of Job Costs
Work in Process Inventory
Job 137 65900
Job 140 16000
Balance 81900
Finished Goods Inventory
Job 139 140600
Balance 140600
Cost of Goods Sold
Job 136 85300
Job 138 133100
Balance 218400

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