Question

Kapoor Company uses job-order costing. During January, the following data were reported: Materials purchased on account: direct materials, $99,500; indirect materials, $14,800. Materials issued: direct materials, $81,500; indirect materials, $ 8,800. Labor cost incurred: direct labor, $67,000; indirect labor, $18,770. Other manufacturing costs incurred (all payables), $46,200. Overhead is applied on the basis of 110 percent of direct labor cost. Work finished and transferred to Finished Goods Inventory cost $235,700. (1) Finished goods costing $212,000 were (2) sold on account for 140 percent of cost. Make the entry to record the cost of the jobs first, followed by the entry to record the revenue from their sale. Any over- or underapplied overhead is closed to Cost of Goods Sold.

Required:

1. Prepare journal entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Materials    $

Accounts Payable    $

b. Work in Process $    $

Overhead Control $    $

Materials    $    $

c. Work in Process $    $

Overhead Control    $ $

Wages Payable $ $

d. Overhead Control $

Various Payables $

e. Work in Process $

Overhead Control $

f. Finished Goods $

Work in Process $

g (1). Cost of Goods Sold $

Finished Goods $

g (2). Accounts Receivable $

Sales Revenue    $

h. Cost of Goods Sold $

Overhead Control $

2. Prepare a T-account for Overhead Control. Post the entries to the T-account in the same order in which they were journalized. If an amount is zero, enter "0". What is the ending balance in this account?

Overhead Control

b

e

c

d

Balance

h

Balance

3. Prepare a T-account for Work-in-Process Inventory. Assume a beginning balance of $10,000, and post the entries to the T-account in the same order in which they were journalized. Work in Process Inventory

Beginning Balance

f

b

c

e

Balance

Answer 1

S.NO.	ACCOUNTS TITLES AND EXPLANATIONS				DEBIT IN $	CREDIT IN $
a.	Raw material Inventory Dr.				114,300
	Accounts payble					114,300
	(For raw material purchased)
b.	Work in process Inventory Dr.				81,500
	Overhead control				8,800
	Raw material Inventory Account					90,300
	(for raw material issued as direct and indirect material)
c	Work in Process Inventory Dr.				67,000
	Overhead control				18,770
	Wages payable					85,770
	(for wages charged to work in process and overheads Account)
d.	Overhead control Account				46,200
	Vvarious payable					46,200
	(For manufacturing overheads incurred for production)
e.	Work in Process Inventory Dr.				73,700
	Overhead Control					73,700
	(For manufacturing overhead applied during the month)
f	Finished Goods Inventory				235,700
	Work in Process Inventory					235,700
	(For transferring completed goods to next process)
g.1	Cost of Goods sold account Dr.				212,000
	Finished Goods Inventory Account					212,000
	(for cost of goods sold transferred from finished goods)
g.2	Accounts receivable Dr.				296,800
	Sales revenue					296,800
	(for goods sold on account)
h.	Cost of Goods sold Dr.				70
	Overhead control					70
	(for under-applied overheads)
OVERHEADS CONTROL
Raw material Inventory		8,800	Work in Process		73,700
Wages payable		18,770	Cost of goods sold		70
Vraious payable		46,200
balance		Nil
WORK IN PROCESS INVENTORY-
Balance		10,000	Finished Goods Inventory		235,700
Raw material Inv.		81,500
Wages Payable		67,000
Overhead control		73,700
			Balance		3500