Question

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.

	April 30				May 31
Inventories
Raw materials	$	30,000			$	36,000
Work in process		9,800				19,400
Finished goods		51,000				34,800
Activities and information for May
Raw materials purchases (paid with cash)						193,000
Factory payroll (paid with cash)						150,000
Factory overhead
Indirect materials						7,000
Indirect labor						34,500
Other overhead costs						93,000
Sales (received in cash)						1,100,000
Predetermined overhead rate based on direct labor cost						55	%

1. Raw materials purchases for cash.
2. Direct materials usage.
3. Indirect materials usage.

  
Prepare journal entries for the above transactions for the month of May.

Answer 1

Trasan	General journal				Debit	Credit
1	Raw materials inventory				193,000
	cash					193,000
2	Work in process inventory				180,000
	Raw materials invnetory					180,000
3	Factory overhead				7,000
	Raw materials inventory					7,000
Trasan	General journal				Debit	Credit
1	Work in process inventory				115,500
	Factory wages payable					115,500
2	Factory overhead				34,500
	Factory wages payable					34,500
3	Factory wages payable				150,000
	cash					150,000
Trasan	General journal				Debit	Credit
1	Factory overhead				93,000
	other accounts					93,000
	Work in process inventory				63,525
	Factory overhead					63,525

Raw Materials					Work in process
RM-April 30	30,000				WIP-April30	9,800
purchases	193,000				DM used	180,000
		7,000	ind materials		DL used	115,500	349,425	cost of goods mfg
		180,000	DM used		OH applied	63525
RM-May 31	36,000				WIP-may 31	19,400
Facotry payroll					finished goods
Factory	150,000				Fg-april 30	51,000
payroll		34,500	ind labor		Cost of	349,425	365,625	COGS
		115,500	DL used		goods mfg
					end bal	34,800
Factory overhead
ind materials	7,000	63,525	OH applied
ind labor	34,500
other oh costs	93,000
underapp	70,975
income Statement(partial)
Sales			1,100,000
cost of goods sold			365,625
Gross profit			734,375

1	cost of direct materials used			180,000
2	cost of direct labor used			115,500
3	cost of goods manufactued			349,425
4	cost of goods sold			365,625
5	Gross profit			734,375
6	overapplied or underapplied oh			70,975