Question

Required information [The following information applies to the questions displayed below.) Widmer Watercraft's predetermined overhead rate is 200% of direct labor. Information on the company's production activities during May follows. a. Purchased raw materials on credit, $200,000. b. Materials requisitions record use of the following materials for the month. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used $ 48,000 32,000 19,200 22,400 6,400 128,000 19,500 $147,500 c. Paid $15,000 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 Total direct labor Indirect labor Total $ 12,000 10,500 37,500 39,000 3,000 102,000 24,000 $126,000 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 $525,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance

Answer 1

Debit 200,000 Credit 66 67 a 68 69 Account Title & explanation Raw Material inventory Accounts Payable (purchased raw material) 200,000 71 b 19,500 128,000 Factory Overhead Work in process Inventory Raw Material inventory (Used direct material and Indirect material to jobs) 147,500 73 74 15,000 Factory Overhead Cash Incurred factory Overheads in cash) 15,000 76 C 77 78 79 80 d 81 102,000 Factory Payroll Cash (Incurred factory payroll) 102,000 24,000 102,000 Factory Overhead Work in process Inventory Factory Payroll (Applied payroll to indirect labor and direct labor) 126.000

89 e 177,000 Work in process Inventory Factory Overhead (12000+37500+39000)*200% (Applied overheads to job 136,138&139) 177,000 91 Finished Goods Inventory (84000+131700+139400) 355,100 Work in process Inventory (transfered work in process inventory to Finished goods Inventory) 355,100 95 96 97 g 525,000 98 Accounts receivable Sales (sold Jobs on account) 525,000 99 100 101 215.700 Cost of Goods Sold (84000+131700) Finished Goods Inventory (to record cost of Jobs sold) 215,700 149,500 102 103 104 105 h 106 107 108 109 Factory Overhead Accumulated depreciation -factory Building Accumulated depreciation -factory Equipment Prepaid insurance Accrued property taxes payable (to record the factory Overheads) 68,000 36,500 10,000 35,000 110

112 i Work in process Inventory (10500+3000)*200% 27,000 113 Factory Overhead 27,000 114 (Applied overheads to jobs 137 & 140) 115 116 117 118 Prepare T-accounts for each of the following general ledger accounts 119 120 Raw Material Inventory 121 a 200,000 122 147,500 b 123 Ending Balance 52,500 d Factory Payroll 102,000 126,000 (24,000) d Ending Balance 124 125 126 127 128 Finished Goods Inventory 355,100 215,700 g 129 d е 130 Work In Process Inventory 128,000 102,000 177,000 27,000 355,100 78,900 131 f Ending Balance 139,400 132 133 Ending Balance 134 135

137 Cost of Goods Sold 215,700 g 138 139 140 141 Factory Overheads 19,500 15,000 24,000 149,500 177,000 e 27,000 i 4,000 h 142 Ending Balance 215,700 143 144 145 Ending Balance