Question

Miller Co.’s March 31 inventory of raw materials is $145,000. Raw materials purchases in April are $660,000, and factory payroll cost in April is $532,000. Overhead costs incurred in April are: indirect materials, $103,000; indirect labor, $62,000; factory rent, $63,000; factory utilities, $45,000; and factory equipment depreciation, $64,000. The predetermined overhead rate is 70% of direct labor cost. Job 306 is sold for $960,000 cash in April. Costs of the three jobs worked on in April follow.

	Job 306				Job 307				Job 308
Balances on March 31
Direct materials		$	55,000			$	74,000
Direct labor			46,000				31,000
Applied overhead			32,200				21,700
Costs during April
Direct materials			161,000				259,000			$	126,000
Direct labor			137,000				215,000				118,000
Applied overhead			?				?				?
Status on April 30	Finished (sold)				Finished (unsold)					In process
Complete this question by entering your answers in the tabs below. Requirement General Journal General Ledger Trial Balance Job Costs Cost of Goods Mfg Gross Profit Prepare journal entries for the month of April's transactions.

Answer 1

Formula sheet

A1	B	C	D	E	F	G	H
2
3		Beginning raw material Inventory	145000
4		Predetermind overhead rate	0.7	of direct labor
5
6
7			Job 306	Job 307	Job 308
8		Balances on March 31
9		Direct materials	55000	74000
10		Direct labor	46000	31000
11		Applied overhead	32200	21700
12		Costs during April
13		Direct materials	161000	259000	126000
14		Direct labor	137000	215000	118000
15		Applied overhead	=D14*$D$4	=E14*$D$4	=F14*$D$4
16		Status on April 30	Finished (sold)	Finished (unsold)	In process
17		Total Cost	=SUM(D9:D15)	=SUM(E9:E15)	=SUM(F9:F15)
18
19		Journal Entry Will be as follows:
20
21		Journal entry for purchase of raw materials
22		Account	Debit	Credit
23		Raw Materials Inventory	660000
24		Account Payable		=D23
25
26
27		Journal entry for raw material expense for job 306:
28		Account and Explanation	Debit	Credit
29		Work in Progress Inventory-Job306	=D13
30		Raw Materials Inventory		=D29
31
32		Journal entry for raw material expense for job 307:
33		Account and Explanation	Debit	Credit
34		Work in Progress Inventory-Job307	=E13
35		Raw Materials Inventory		=D34
36
37		Journal entry for raw material expense for job 308:
38		Account and Explanation	Debit	Credit
39		Work in Progress Inventory-Job308	=F13
40		Raw Materials Inventory		=D39
41
42		Journal entry for Labor costs for job 306:
43		Account and Explanation	Debit	Credit
44		Work in Progress Inventory -Job 306	=D14
45		Wage Payable		=D44
46
47		Journal entry for Labor costs for job 307:
48		Account and Explanation	Debit	Credit
49		Work in Progress Inventory -Job 307	=E14
50		Wage Payable		=D49
51
52		Journal entry for Labor costs for job 308:
53		Account and Explanation	Debit	Credit
54		Work in Progress Inventory -Job 308	=F14
55		Wage Payable		=D54
56
57		Journal entry for manufacturing overheads
58		Account and Explanation	Debit	Credit
59		Manufacturing Overhead	=SUM(E60:E64)
60		Raw materials inventory		103000
61		Wage Payable		62000
62		Factory Rent		63000
63		Factory Utilities		45000
64		Equipment Depreciation		64000
65
66		Journal Entry to apply manufacturing overhead to Job-306
67		Account and Explanation	Debit	Credit
68		Work in Progress Inventory- Job 306	=D15
69		Manufacturing Overhead		=D68
70
71		Journal Entry to apply manufacturing overhead to Job-307
72		Account and Explanation	Debit	Credit
73		Work in Progress Inventory- Job 307	=D34
74		Manufacturing Overhead		=D73
75
76		Journal Entry to apply manufacturing overhead to Job-308
77		Account and Explanation	Debit	Credit
78		Work in Progress Inventory- Job 308	=F15
79		Manufacturing Overhead		=D78
80
81		Journal Entry to transfer goods from work in progress to finished goods for job 306
82		Account and Explanation	Debit	Credit
83		Finished Goods Inventory - Job306	=E84
84		Work in Progress Inventory - Job 306		=D17
85
86		Journal Entry to transfer goods from work in progress to finished goods for job 307
87		Account and Explanation	Debit	Credit
88		Finished Goods Inventory - Job307	=E89
89		Work in Progress Inventory - Job 307		=E17
90
91		Journal Entry for Sale of Job 306
92		Account and Explanation	Debit	Credit
93		Account Receivables	960000
94		Sales Revenue		=D93
95
96		Journal entry for cost of goods sold for job 306
97		Account and Explanation	Debit	Credit
98		Cost of goods sold	=D83
99		Finished Goods Inventory-Job306		=D98
100
101