Question

Journal Entries, T-Accounts

Ehrling Brothers Company makes jobs to customer order. During the month of July, the following occurred:

1. Materials were purchased on account for $45,760.
2. Materials totaling $40,980 were requisitioned for use in producing various jobs.
3. Direct labor payroll for the month was $22,400 with an average wage of $14 per hour.
4. Actual overhead of $8,860 was incurred and paid in cash.
5. Manufacturing overhead is charged to production at the rate of $5.40 per direct labor hour.
6. Completed jobs costing $58,000 were transferred to Finished Goods.
7. Jobs costing $58,000 were sold on account for $ 73,750. Make the entry to record the revenue from the sale first, followed by the entry to record the cost of the jobs.

Beginning balances as of July 1 were:

Materials Inventory	$1,200
Work-in-Process Inventory	3,400
Finished Goods Inventory	2,620

Required:

1. Prepare the journal entries for the preceding events.

a.
b.
c.
d.
e.
f.
g (1).
g (2).

2. Calculate the ending balances of:

a. Materials Inventory	$
b. Work-in-Process Inventory	$
c. Overhead Control	$
d. Finished Goods Inventory	$

Answer 1

Date	Account titles & Explanations					Debit	Credit
a	Raw materials inventory					45,760
	Accounts payable						45,760
b	Work in process inventory					40,980
	Raw materials inventory						40,980
c	work in process inventory					22,400
	wages payable						22,400
d	Manufacturing overhead					8,860
	cash						8,860
e	work in process inventory					8640
	Manufacturing overhead						8,640
	(22400/14=		1600	hrs
f	finished goods inventory					58,000
	work in process inventory						58,000
g1)	Accounts receivable					73,750
	sales						73,750
g2)	cost of goods sold					58,000
	finished goods inventory						58,000
a)	Materials inventory
	BB	1,200	b)	40,980
	a)	45,760
	End bal	5,980
b)	work in process inventory
	BB	3,400	f)	58,000
	b)	40,980
	c)	22,400
	e)	8640
	End bal	17,420
c)	overhead control
	d)	8,860	e)	8640
	End bal	220
d)	Finished goods inventory
	BB	2,620	g2)	58,000
	f)	58,000
	End bal	2,620