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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 payrollAccounts receivableAccounts payableRaw materials inventoryFinished goods inventoryCashCost of goods soldFactory overhead     
       (Click to select)Cost of goods soldFactory overheadCashRaw materials inventoryAccounts receivableAccounts payableFinished goods inventoryFactory payroll     
b.   (Click to select)Finished goods inventoryGoods in process inventoryFactory payrollAccounts payableAccounts receivableCashSalesFactory overhead     
       (Click to select)Goods in process inventoryAccounts receivableCashSalesFactory payrollAccounts payableFactory overheadFinished goods inventory     
c.   (Click to select)Raw materials inventoryAccounts receivableFactory overheadCashFactory payrollProperty taxes payableGoods in process inventoryPrepaid insurance     
       (Click to select)Factory payrollPrepaid insuranceAccounts receivableCashGoods in process inventoryProperty taxes payableFactory overheadRaw materials inventory     
d.   (Click to select)Factory overheadCashProperty taxes payableAccounts payableRaw materials inventoryFactory payrollCost of goods soldGoods in process inventory     
  (Click to select)Factory payrollCost of goods soldRaw materials inventoryAccounts payableCashFactory overheadProperty taxes payableGoods in process inventory     
       (Click to select)CashGoods in process inventoryProperty taxes payableAccounts payableFactory overheadRaw materials inventoryCost of goods soldFactory payroll     
e.   (Click to select)Goods in process inventoryProperty taxes payableFactory overheadRaw materials inventoryFinished goods inventoryFactory payrollPrepaid insuranceCost of goods sold     
  (Click to select)Property taxes payableFinished goods inventoryGoods in process inventoryCost of goods soldFactory overheadFactory payrollPrepaid insuranceRaw materials inventory     
       (Click to select)Raw materials inventoryFinished goods inventoryGoods in process inventoryFactory payrollPrepaid insuranceFactory overheadProperty taxes payableCost of goods sold     
f.   (Click to select)Factory payrollRaw materials inventoryCost of goods soldFactory overheadSalesGoods in process inventoryFinished goods inventoryPrepaid insurance     
       (Click to select)Goods in process inventoryCost of goods soldRaw materials inventoryPrepaid insuranceFactory overheadSalesFactory payrollFinished goods inventory     
g.   (Click to select)Factory overheadCost of goods soldAccounts receivableGoods in process inventoryFactory payrollProperty taxes payablePrepaid insuranceFinished goods inventory     
       (Click to select)Accounts receivableCost of goods soldProperty taxes payableFinished goods inventoryFactory PayrollFactory overheadGoods in process inventoryPrepaid insurance     
h.   (Click to select)Factory overheadFinished goods inventoryGoods in process inventorySalesAccounts receivableFactory payrollPrepaid insuranceCost of goods sold     
       (Click to select)Factory payrollGoods in process inventoryFinished goods inventoryFactory overheadAccounts receivableCost of goods soldSalesPrepaid insurance     
  (Click to select)SalesFinished goods inventoryRaw materials inventoryCashAccounts receivableFactory overheadFactory payrollCost of goods sold     
       (Click to select)Cost of goods soldRaw materials inventoryCashFactory overheadFinished goods inventoryFactory payrollAccounts receivableSales     
i.   (Click to select)Accum. Depreciation-factory equipmentCost of goods soldProperty taxes payableFactory overheadGoods in process inventoryPrepaid insuranceAccum. depreciation-factory buildingSales     
       (Click to select)Prepaid insuranceCost of goods soldSalesAccum. depreciation-factory buildingProperty taxes payableAccum. depreciation-factory equipmentFactory overheadGoods in process inventory     
       (Click to select)Accum. depreciation-factory buildingAccum. depreciation-factory equipmentSalesProperty taxes payablePrepaid insuranceCost of goods soldFactory overheadGoods in process inventory     
       (Click to select)Cost of goods soldGoods in process inventoryAccum. depreciation-factory buildingSalesPrepaid insuranceProperty taxes payableAccum. depreciation-factory equipmentFactory overhead     
       (Click to select)Accum. depreciation-factory equipmentFactory overheadPrepaid insuranceProperty taxes payableAccum. depreciation-factory buildingCost of goods soldGoods in process inventorySales     
j.   (Click to select)SalesAccounts receivableFactory payrollGoods in process inventoryFactory overheadCashFinished goods inventoryRaw materials inventory     
       (Click to select)Goods in process inventoryFinished goods inventoryCashSalesRaw materials inventoryFactory overheadAccounts receivableFactory payroll     


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

Solutions

Expert Solution

Part 25)

The job cost sheets are prepared as below:

Job No. 136 Job No. 137 Job No. 138 Job No. 139 Job No. 140
Materials 49,000 33,500 20,000 23,000 7,000
Labor 12,100 10,800 37,700 39,200 3,000
Overhead (200% of Labor) 24,200 21,600 75,400 78,400 6,000
Total cost $85,300 $65,900 $133,100 $140,600 $16,000

_____

Part 26)

The journal entries are given as follows:

Event General Journal Debit Credit
a) Raw Materials Inventory $260,000
Accounts Payable $260,000
b) Factory Payroll $129,800
Cash $129,800
c) Factory Overhead $15,750
Cash $15,750
d) Goods in Process Inventory $132,500
Factory Overhead $20,000
Raw Materials Inventory $152,500
e) Goods in Process Inventory $102,800
Factory Overhead $27,000
Factory Payroll $129,800
f) Goods in Process Inventory [(12,100 + 37,700 + 39,200)*200%] $178,000
Factory Overhead $178,000
g) Finished Goods Inventory (85,300 + 133,100 + 140,600) $359,000
Goods in Process Inventory $359,000
h) Accounts Receivable $530,000
Sales $530,000
Cost of Goods Sold (85,300 + 133,100) $218,400
Finished Goods Inventory $218,400
i) Factory Overhead $153,500
Accumulated Depreciation - Factory Building $69,500
Accumulated Depreciation - Factory Equipment $37,500
Prepaid Insurance $11,000
Property Taxes Payable $35,500
J Goods in Process Inventory [(10,800 + 3,000)*200%] $27,600
Factory Overhead $27,600

_____

Part 27)

The report is presented as below:

Report of Job Costs
Goods in Process Inventory
Job 137 65,900
Job 140 16,000
Balance $81,900
Finished Goods Inventory
Job 139 140,600
Balance $140,600
Cost of Goods Sold
Job 136 85,300
Job 138 133,100
Balance $218,400

_____

The Goods in Process Inventory Ledger is prepared as follows:

Goods in Process Inventory
d) 132,500 g) 359,000
e) 102,800
f) 178,000
j) 27,600
Bal. $81,900

The Goods in Inventory Account balance in the report and ledger reconcile with each other.


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