Question

Chap 15 Homework Custom Cabinetry has one job in process Job 120) as of June 30, at that time, its job cost sheet reports direct materials of $6.900 direct labor of $3,000, and applied overhead of $2,400. Custom Cabinetry applies overhead at the rate of 80% of direct labor cost. During July. Job 120 is sold on account) for $26,000. Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July July Product Costs Direct materials Direct labor Overhead applied Job 120 $2,200 2.900 ob 121 $8.300 4.500 Job 122 $3,000 2.500 Total $13.500 9,900 points Skipood 1. Prepare journal entries for the following in July Book a. Direct materials used in production b. Direct labor used in production c. Overhead applied d. The sale of Job 120. e. Cost of goods sold for Job 120 Print References 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. Assume there are no Jobs in Finished Goods Inventory as of June 30.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries for the above transactions in July, View transaction list

Answer 1

1)

Transaction	Account titles and explanation	Debit	Credit
a)	Work in process inventory	$13500
	Raw materials inventory		$13500
	(To record raw materials used in production)
b)	Work in process inventory	$9900
	Wages payable		$9900
	(To record direct labor used in production)
c)	Work in process inventory ($9900*80%)	$7920
	Manufacturing overhead		$7920
	(To record manufacturing overhead applied)
d)	Accounts receivable	$26000
	Sales		$26000
	(To record sale of Job 120)
e)	Cost of goods sold	$19720
	Finished goods inventory		$19720
	(To record cost of goods sold)

Beginning balance of Work in process (job 120)= $6900+3000+2400= $12300

Cost of goods sold= Beginning balance+Direct materials+Direct labor+Manufacturing overhead

= $12300+2200+2900+(2900*80%)= $19720

2) Work in process balance= Job 122= Direct materials+Direct labor+Overhead applied

= $3000+2500+(2500*80%)= $7500

Finished goods balance= Job 121= Direct materials+Direct labor+Overhead applied

= $8300+4500+(4500*80%)= $16400