Question

CHART OF ACCOUNTSKurtz Fencing Inc.General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
125	Notes Receivable
126	Interest Receivable
131	Materials
132	Work in Process
133	Factory Overhead
134	Finished Goods
141	Supplies
142	Prepaid Insurance
143	Prepaid Expenses
181	Land
191	Machinery and Equipment
192	Accumulated Depreciation-Machinery and Equipment

	LIABILITIES
210	Accounts Payable
221	Utilities Payable
231	Notes Payable
236	Interest Payable
241	Lease Payable
251	Wages Payable
252	Consultant Fees Payable

	EQUITY
311	Common Stock
340	Retained Earnings
351	Dividends
390	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expenses
532	Insurance Expense
533	Utilities Expense
534	Office Supplies Expense
540	Administrative Expenses
561	Depreciation Expense-Machinery and Equipment
590	Miscellaneous Expense
710	Interest Expense

Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations: a. Materials purchased on account, $28,790 b. Materials requisitioned and factory labor used: Materials Job 301 Factory Labor $2,910 $2,880 3,690 3,860 2,300 7,820 1,780 6,990 5,310 5,050 305 306 3,700 3,280 For general factory use 1,070 4,180 c. Factory overhead costs incurred on account, $5,600. d. Depreciation of machinery and equipment, $1,970. e. The factory overhead rate is $53 per machine hour. Machine hours used: Job Machine Hours Total f. Jobs completed: 301, 302, 303 and 305.

Answer 1

Kurtz Fencing Inc uses a Job order Costing system
Material Purchased$		28,790
Job order - must follow process base Journal Entries in relates
to moveme of Raw material , Factoy Overhead , cost of goods sold , Finished goods etc
Job wise cost + Overhead cost ( on Hr basis)
Job -	Material($)	Factory Labour($)	Overhead($)-a*b	Total	Overhead Hr-a	Rate / hr-b
301	2,880	2,910	1,325	7,115	25	53
302	3,690	3,860	1,802	9,352	34	53
303	2,300	1,780	1,590	5,670	30	53
304	7,820	6,990	3,763	18,573	71	53
305	5,310	5,050	2,226	12,586	42	53
306	3,700	3,280	1,378	8,358	26	53
Total	25,700	23,870	12,084	61,654
Total Cost relates
material $	25,700
Factory Labour$	23,870
Total Cost	49,570
As per Question, For general Factiry use
Material $	1,070
Factory Labour$	4,180
Total Cost $	5,250
As per Question Job completed 301,302.303 and 305
All above Job code cost transfer to == Finished Goods
Job -	Total Cost($)
301	7,115
302	9,352
303	5,670
305	12,586
Total cost transfer to Finished goods	34,723
Job still under Work In process
Job -	Total Cost($)
304	18,573
306	8,358
Total cost under WIP	26,931
Job were shipped and billed to customer
Job -	Total Cost($)
301	8,270
302	11,720
303	15,730
Total Sales	35,720
Cost of goods sold
Job -	Total Cost($)
301	7,115
302	9,352
303	5,670
Total Cost of Goods Sold	22,137
Details	Debit($)	Credit($)
Raw Material Inventory	28790
Accoutn payable		28,790
Material Purchased accounted
Factory Overhead	5,600
Accoutn payable		5,600
( Factory coverhead cost incurred- Accounted)
Factory Overhead	1,970
Accumulated depreciation		1,970
( Accounted depreciation - Machinery & Equipment
Work in process	12,084
Factory Overhead		12,084
( the factory OH @ $ 53per Machine Hr - accounted )
(Number of hr *$53/ hr)
228 hr *$ 53/ Hr
Finished Goods	34,723
Work in process		34,723
( Accounted cost transfer to Finished goods)
Account receivable	35,720
Sales		35,720
( recorded Sale transaction
Cost of goods sold	22,137
Finished Goods		22,137
( Accounted cost of goods sold to FG - relates to 3 Job
Work In process	49,570
Factory Overhead	5,250
Raw Material		26,770	($25700+$1070)
Payroll		28,050
( accounted consumption of material + Labour)

We need to build up couple of T account
	Work In process
	Debit($)		Credit($)
Material	25,700	Finished goods	34,723
Labour / Payroll	23,870	Closing Balance	26,931
Factory Overhead	12,084
Total	61,654	Total	61,654
	Finished goods
	Debit($)		Credit($)
Work in process	34,723	Cost of goods sold	22,137
		Closing Balance	12,586
Total	34,723	Total	34,723
Unfinished goods - Work in process( as above)
Job -	Material($)	Factory Labour($)	Overhead($)-a*b	Total	Overhead Hr-a	Rate / hr-b
304	7,820	6,990	3,763	18,573	71	53
306	3,700	3,280	1,378	8,358	26	53