Question

Exercise 3-2 Prepare T-Accounts [LO3-2, LO3-4) Jurvin Enterprises is a manufacturing company that had no beginning inventories. A subset of the transactions that it recorded during a recent month is shown below. a. $75,000 in raw materials were purchased for cash. b. $72,500 in raw materials were used in production. Of this amount, $66,000 was for direct materials and the remainder was for indirect materials. c. Total labor wages of $152,000 were incurred and paid. Of this amount, $133,100 was for direct labor and the remainder was for indirect labor. d. Additional manufacturing overhead costs of $125,300 were incurred and paid e Manufacturing overhead of $126,700 was applied to production using the company's predetermined overhead rate, f. All of the jobs in process at the end of the month were completed 9. All of the completed jobs were shipped to customers h. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold

Answer 1

CASH ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance [Balancing Figure]	26,500		By Raw Materials Account	75,000
	To Cost of Goods Sold Account	3,25,800		By Work in Process Account	1,33,100
				By Manufacturing Overhead Account	18,900
				By Manufacturing Overhead Account	1,25,300
				By Closing Balance	-
	TOTAL	3,52,300		TOTAL	3,52,300

NOTE: Indirect Labour = $1,52,000 - $1,33,100 = $18,900.

RAW MATERIALS ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance	-		By Work in Process Account	66,000
	To Cash Account	75,000		By Manufacturing Overhead Account	6,500
				By Closing Balance [Balancing Figure]	2,500
	TOTAL	75,000		TOTAL	75,000

NOTE: Indirect Material = $72,500 - $66,000 = $6,500.

WORK IN PROCESS ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance	-		By Finished Goods Account [Balancing Figure]	3,25,800
	To Raw Materials Account	66,000		By Closing Balance	-
	To Cash Account	1,33,100
	To Manufacturing Overhead Account	1,26,700
	TOTAL	3,25,800		TOTAL	3,25,800

FINISHED GOODS ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance	-		By Cost of Goods Sold Account	3,25,800
	To Work in Process Account	3,25,800		By Closing Balance	-
	TOTAL	3,25,800		TOTAL	3,25,800

MANUFACTURING OVERHEAD ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance	-		By Work in Process Account	1,26,700
	To Raw Materials Account	6,500		By Cost of Goods Sold Account [Balancing Figure]	24,000
	To Cash Account	18,900		By Closing Balance	-
	To Cash Account	1,25,300
	TOTAL	1,50,700		TOTAL	1,50,700

NOTE: Overheads are Underabsorbed by $24,000.

COST OF GOODS SOLD ACCOUNT
Dr.	Cr.
DATE	PARTICULARS	AMOUNT [In $]	DATE	PARTICULARS	AMOUNT [In $]
	To Opening Balance	-		By Cash Account	3,25,800
	To Finished Goods Account	3,25,800		By Profit & Loss Account	24,000
	To Manufacturing Overhead Account	24,000		By Closing Balance	-
	TOTAL	3,49,800		TOTAL	3,49,800

ADJUSTED COST OF GOODS SOLD = $3,25,800 - $24,000 = $3,01,800/-