In: Accounting
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 | $ |
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.