Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October 25 points a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 Indirect materials). C. Accrued direct labor cost of $49,000 and Indirect labor cost of $20,000. d. Depreciation recorded on factory equipment, $106,000. e. Other manufacturing overhead costs accrued during October, $131,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,100 machine-hours were used in October. g. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $450,000 to complete according to their job cost sheets were shipped to customers during the month. These Jobs were sold on account at 26% above cost. eBook Print References Required: 1. Prepare Journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work In Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work In Process has a beginning balance of $35,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Credit Debit 210,000 Raw materials Accounts payable 210,000 151,200 Work in process Manufacturing overhead Raw materials 37,800 189,000 3c Work in process Manufacturing overhead 49.000 20,000 Salaries and wages payable 69,000 d. 106,000 Manufacturing overhead Accumulated depreciation 106,000 Manufacturing overhead _131,000

Answer 1

Solution 1:

Journal Enteries - Polaris Company
S. No	General Journal	Debit	Credit
a	Raw Material Inventory Dr	$210,000.00
	To Accounts Payable		$210,000.00
	(Raw material purchased on account)
b	Work In Process Dr	$151,200.00
	Manufacturing Overhead Dr	$37,800.00
	To Raw Material Inventory		$189,000.00
	(Being Raw material used in production)
c	Work In Process Dr	$49,000.00
	Manufacturing Overhead Dr	$20,000.00
	To Wages Payable		$69,000.00
	(Being labor cost accrued)
d	Manufacturing overhead Dr	$106,000.00
	To Accumulated depreciation - Factory Equipment		$106,000.00
	(Being depreciation charged on factory equipment)
e	Manufacturing overhead Dr	$131,000.00
	To Accounts Payable		$131,000.00
	(Being other manufacturing overhead cost incurred)
f	Work In Process Dr (76100 * $9)	$684,900.00
	To Manufacturing overhead		$684,900.00
	(Being manufacturing overhead applied to prodcution)
g	Finished Goods Inventory Dr	$512,000.00
	To Work In Process		$512,000.00
	(Being cost of completed goods transferred to finished goods)
h-1	Cost of goods sold Dr	$450,000.00
	To Finished Goods Inventory		$450,000.00
	(Being cost of unit sold transferred to COGS)
h-2	Accounts Receivables Dr ($450,000*126%)	$567,000.00
	To Sales Revenue		$567,000.00
	(To record sales on account)

Solution 2:

Manufacturing Overhead Account
Particulars	Debit	Particulars	Credit
To Raw material inventory	$37,800.00	By Work In Process	$684,900.00
To Wages Payable	$20,000.00
To Accumulated depreciation - Factory Equipment	$106,000.00
To Accounts Payable	$131,000.00
To Ending balance	$390,100.00
Total	$684,900.00	Total	$684,900.00

Work in Process Account
Particulars	Debit	Particulars	Credit
To Beginning Balance	$35,000.00	By Finished goods inventory	$512,000.00
To Raw Material Inventory	$151,200.00	By Ending balance	$408,100.00
To Wages Payable	$49,000.00
To Manufacturing overhead applied	$684,900.00
Total	$920,100.00	Total	$920,100.00