Question

a. Purchased raw materials on credit, $240,000. b. Materials requisitions record use of the following materials for the month Job 136 Job 137 Job 138 Job 139 Job 140 $ 48,000 32.500 19,800 23,400 7,000 Total direct materials Indirect materials 130,700 19.500 Total materials used $150.200 c. Paid $15.750 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 $ 12,200 10.500 37.900 39,400 3,600 Total direct labor Indirect labor 103,600 26,500 Total $ 130,100 e. Applied overhead to Jobs 136, 138, and 139. f. Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $545.000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance) Depreciation of factory building Depreciation of factory equipment Expired factory insurance Accrued property taxes payable $70,000 38.500 11,000 36.500 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.

Answer 1

1)

	Job No 136	Job No 137	Job No 138	Job No 139	Job No 140
Materials	$48000	$32500	$19800	$23400	$7000
Labor	12200	10500	37900	39400	3600
Overhead	(12200*200%)= 24400	(10500*200%)= 21000	(37900*200%)= 75800	(39400*200%)= 78800	(3600*200%)= 7200
Total cost	$84600	$64000	$133500	$141600	$17800

2)

No.	Date	Account titles and explanation	Debit	Credit
1.	a	Raw materials inventory	$240000
		Account payable		$240000
		(To record raw materials purchased on account)
2.	b	Work in process inventory	$130700
		Factory overhead	$19500
		Raw materials inventory		$150200
		(To record raw materials used)
3.	c	Factory overhead	$15750
		Cash		$15750
		(To record cash paid)
4.	d	Work in process inventory	$103600
		Factory overhead	$26500
		Cash		$130100
		(To record direct and indirect labor paid in cash)
5.	e	Work in process inventory ($24400+75800+78800)	$179000
		Factory overhead		$179000
		(To record factory overhead applied of Jobs 136, 138 and 139)
6.	f	Finished goods inventory ($84600+133500+141600)	$359700
		Work in process inventory		$359700
		(To record transferred of Job 136, 138 and 139 to finished goods)
7.	g	Account receivable	$545000
		Sales		$545000
		(To record sales)
8.		Cost of goods sold ($84600+133500)	$218100
		Finished goods inventory		$218100
		(To record cost of goods sold)
9.	h	Factory overhead	$156000
		Accumulated depreciation- Factory building		$70000
		Accumulated depreciation- Factory equipment		$38500
		Prepaid insurance		$11000
		Property tax payable		$36500
		(To record actual factory overhead)
10.	i	Work in process inventory ($10500+3600)*200%	$28200
		Factory overhead		$28200
		(To record overhead applied of Job 137 and 140)

3)

Raw materials Inventory					Work in process Inventory
a	$240000	150200	b		b	$130700	359700	f
					d	103600
					e	179000
End. bal.	$89800				i	28200
					End. bal.	$81800
Factory overhead					Finished goods Inventory
b	$19500	179000	e		f	$359700	218100	g
c	15750	28200	i
d	26500
h	156000				End. bal.	$141600
End. bal.	$10550
Cost of Goods Sold
g	$218100
End. bal.	$218100

4)

Report of Job Costs
Work in process Inventory
Job 137	$64000
Job 140	17800
Balance	$81800
Finished goods Inventory
Job 139	$141600
Balance	$141600
Cost of Goods Sold
Job 136	$84600
Job 138	133500
Balance	$218100