Question

Concord Corp. designs and manufactures mascot uniforms for high school, college, and professional sports teams. Since each team’s uniform is unique in color and design, Concord uses a job order costing system. On January 1, the T-accounts for some of Concord’s primary balance sheet accounts were as follows:

Raw Materials Inventory

Work in Process Inventory

Beg.

16,000

Beg.

30,200

Finished Goods Inventory

Cash

Beg.

23,400

Beg.

47,000

Accounts Receivable

Accounts Payable

Beg.

62,300

Beg.

42,500

During the year, the following events occurred:

1.	Concord purchased raw materials costing $83,000 on account.
2.	Concord used $93,000 of raw materials in production. Of these, 70% were classified as direct materials and 30% as indirect materials. (Concord maintains a single Raw Materials Inventory account.)
3.	Concord used 33,300 hours of direct labor. The company’s average direct labor rate was $7.50 per hour (credit Wages Payable).
4.	The company’s only indirect labor cost was the salary of a security guard hired to watch the company’s shop after hours. The guard’s annual salary was $26,200 (credit Wages Payable).
5.	Other manufacturing overhead costs the company incurred on account totaled $69,600.
6.	Concord applied $134,000 in manufacturing overhead.
7.	The company completed production of goods costing $325,000.
8.	The company’s Cost of Goods Sold balance was $303,750 before adjusting for over- or underapplied overhead.
9.	Sales revenue was $444,000 (all sales were made on account).
10.	Concord collected $428,000 from customers.
11.	The company paid accounts payable of $107,000.
12.	At year-end, all wages earned during the year had been paid. Record the transactions above in the appropriate T-accounts and calculate ending balances. (Post entries in order presented in the problem.)

Answer 1

Solution:

Raw materials inventory
Event	Debit	Event	Credit
Beg.	$16,000.00	2	$93,000.00
1	$83,000.00	End	$6,000.00
Total	$99,000.00	Total	$99,000.00

Work In Process Inventory
Event	Debit	Event	Credit
Beg.	$30,200.00	7	$325,000.00
2	$65,100.00	End	$154,050.00
3	$249,750.00
6	$134,000.00
Total	$479,050.00	Total	$479,050.00

Finished goods inventory
Event	Debit	Event	Credit
Beg.	$23,400.00	8	$303,750.00
7	$325,000.00	End	$44,650.00
Total	$348,400.00	Total	$348,400.00

Cost of goods sold
Event	Debit	Event	Credit
8	$303,750.00	End Bal	$303,750.00
Total	$303,750.00	Total	$303,750.00

Manufacturing overhead
Event	Debit	Event	Credit
2	$27,900.00	6	$134,000.00
4	$26,200.00
5	$69,600.00
End	$10,300.00
Total	$134,000.00	Total	$134,000.00

Sales Revenue
Event	Debit	Event	Credit
End	$444,000.00	9	$444,000.00
Total	$444,000.00	Total	$444,000.00

Cash
Event	Debit	Event	Credit
Beg	$47,000.00	11	$107,000.00
10	$428,000.00	12	$275,950.00
		End	$92,050.00
Total	$475,000.00	Total	$475,000.00

Accounts Payable
Event	Debit	Event	Credit
11	$107,000.00	Beg	$42,500.00
End	$88,100.00	1	$83,000.00
		5	$69,600.00
Total	$195,100.00	Total	$195,100.00

Accounts Receivables
Event	Debit	Event	Credit
Beg	$62,300.00	10	$428,000.00
9	$444,000.00	End	$78,300.00
Total	$506,300.00	Total	$506,300.00

Wages Payable
Event	Debit	Event	Credit
12	$275,950.00	3	$249,750.00
		4	$26,200.00
Total	$275,950.00	Total	$275,950.00