Question

Exercise 3-5 Journal Entries and T-accounts (LO3-1, LO3-2] The Polaris Company uses a job-order costing system. The following transactions occurred in October: points eBook a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials). c. Accrued direct labor cost of $50,000 and indirect labor cost of $20,000. d. Depreciation recorded on factory equipment, $106,000. e. Other manufacturing overhead costs accrued during October, $129.000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,200 machine-hours were used in October. g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 22% above cost. 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 $34,000.

Answer 1

Journal Entries
Events	Particulars			Debit	Credit
a)	Raw Materials			$ 210,000.00
	To Accounts Payable				$ 210,000.00
b)	WIP			$ 152,000.00
	Manu. OH			$   38,000.00
	To Raw Materials				$ 190,000.00
c)	WIP			$   50,000.00
	Manu. OH			$   20,000.00
	To Factory Payroll Payable				$   70,000.00
d)	Manu. OH			$ 106,000.00
	To Accumulated Depreciation				$ 106,000.00
e)	Manu. OH			$ 129,000.00
	To Accounts Payable				$ 129,000.00
f)	WIP			$ 685,800.00
	To Manu. OH				$ 685,800.00
	($ 9 x 76200)
g)	Finished Goods			$ 513,000.00
	To WIP				$ 513,000.00
h)	Cost of Goods sold			$ 449,000.00
	To Finished Goods				$ 449,000.00
	Accounts Receivable			$ 547,780.00
	To Sales				$ 547,780.00
	($ 449000 x 122%)

Manufacturing OH					Work in Process
b)	$   38,000.00	f)	$ 685,800.00		Beg. Bal	$   34,000.00	g)	$ 513,000.00
c)	$   20,000.00				b)	$ 152,000.00	End. Bal.	$ 408,800.00
d)	$ 106,000.00				c)	$   50,000.00
e)	$ 129,000.00				f)	$ 685,800.00
End. Bal	$ 392,800.00

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