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Required information [The following information applies to the questions displayed below.] Widmer Watercraft’s predetermined overhead rate...

Required information

[The following information applies to the questions displayed below.]

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

  1. Purchased raw materials on credit, $200,000.
  2. Materials requisitions record use of the following materials for the month.
Job 136 $ 48,500
Job 137 33,500
Job 138 19,400
Job 139 23,400
Job 140 7,200
Total direct materials

132,000

Indirect materials 19,500
Total materials used $ 151,500
  1. Paid $15,750 cash to a computer consultant to reprogram factory equipment.
  2. Time tickets record use of the following labor for the month. These wages were paid in cash.
Job 136 $ 12,100
Job 137 10,600
Job 138 37,700
Job 139 39,000
Job 140 3,400
Total direct labor 102,800
Indirect labor 25,500
Total $ 128,300
  1. Applied overhead to Jobs 136, 138, and 139.
  2. Transferred Jobs 136, 138, and 139 to Finished Goods.
  3. Sold Jobs 136 and 138 on credit at a total price of $530,000.
  4. 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 37,000
Expired factory insurance 11,000
Accrued property taxes payable 36,500
  1. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

1. Prepare journal entries to record the events and transactions a through i.

Solutions

Expert Solution

Job 136 Job 137 Job 138 Job 139 Job 140
Direct materials 48500 33500 19400 23400 7200
Direct labor 12100 10600 37700 39000 3400
Overhead 24200 21200 75400 78000 6800
Total 84800 65300 132500 140400 17400
Journal:
Transaction General Journal Debit Credit
a. Raw materials inventory 200,000
Accounts payable 200,000
b Goods in process inventory 132,000
Factory overhead 19,500
Raw materials inventory 151,500
c. Factory overhead 15,750
Cash 15,750
d Goods in process inventory 102,800
Factory overhead 25,500
Factory payroll 128,300
e Goods in process inventory 177,600 =24200+75400+78000
Factory overhead 177,600
f Finished goods inventory 357,700 =84800+132500+140400
Goods in process inventory 357,700
g Accounts receivable 530,000
Sales 530,000
g Cost of goods sold 217,300 =84800+132500
Finished goods inventory 217,300
h Factory overhead 154,000
Accum. depreciation—Factory building 69,500
Accum. depreciation—Factory equipment 37,000
Prepaid insurance 11,000
Property taxes payable 36,500
i Goods in process inventory 28,000 =21200+6800
Factory overhead 28,000

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