Question

GL1501 - Based on Problem 15-1A Marcelino Company LO C2, P1, P2, P3, P4 Marcelino Co.'s March 31 inventory of raw materials is $80,000. Raw materials purchases in April are $500,000, and factory payroll cost in April is $363,000. Overhead costs incurred in April are: indirect materials, $50,000; indirect labor, $23,000; factory rent $32,000; factory utilities. $19,000; and factory equipment depreciation, $51,000. The predeterr labor cost. Job 306 is sold for $635,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 Job 307 Job 308 $ 29,000 20,000 10,000 $ 35,000 18.000 9,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 135,000 B5,000 220,000 150,000 $100,000 105,000 Finished (sold) Finished unsold) process Complete this question by entering your answers in the tabs below. Requirement General Journal General Ledger Trial Balance Job Costs Cost of Goods Mfg Gross Profit Prepare journal entries for the month of April's transactions. View transaction list Journal entry worksheet

Answer 1

Solution:

Journal Entries - Marcelino Co
Event	Particulars	Debit	Credit
a	Raw material inventory Dr	$500,000.00
	To Accounts Payable		$500,000.00
	(To record purchase of raw material)
b	Work In Process Dr	$455,000.00
	To Raw material inventory		$455,000.00
	(To record raw material used in production)
c	Work In Process Dr	$340,000.00
	To Cash		$340,000.00
	(To record direct labor payment and assigment to production)
d	Factory overhead Dr	$23,000.00
	To Cash		$23,000.00
	(To record Indirect labor payment and assigment to factory overhead)
e	Work In Process Dr	$170,000.00
	To Factory Overhead		$170,000.00
	(To apply overhead to production)
f1	Factory Overhead Dr	$50,000.00
	To Raw material inventory		$50,000.00
	(To record indirect material used)
f2	Factory Overhead Dr	$32,000.00
	To Cash		$32,000.00
	(To record factory rent)
f3	Factory Overhead Dr	$19,000.00
	To Cash		$19,000.00
	(To record factory utilities)
f4	Factory Overhead Dr	$51,000.00
	To Accumulated Depreciation		$51,000.00
	(To record factory depreciation)
g	Finished goods inventory Dr	$828,500.00
	To Work In Process		$828,500.00
	(Being completed jobs transferred to finished goods)
h	Cost of goods sold Dr	$321,500.00
	To Finished goods inventory		$321,500.00
	(To record cost of goods sold for Job 306)
i	Cash Dr	$635,000.00
	To Sales Revenue		$635,000.00
	(To record sales of Job 306)
j	Cost of goods sold Dr	$5,000.00
	To Factory Overhead		$5,000.00
	(To close underapplied overhead to COGS)

Computation of production cost incurred in april and total cost assigned to each job
Particulars	Job 306	Job 307	Job 308	Total
From March:
Direct material	$29,000.00	$35,000.00	$0.00	$64,000.00
Direct labor	$20,000.00	$18,000.00	$0.00	$38,000.00
Applied overhead (50% of direct labor)	$10,000.00	$9,000.00	$0.00	$19,000.00
Beginning Goods in Process	$59,000.00	$62,000.00	$0.00	$121,000.00
For April:
Direct material	$135,000.00	$220,000.00	$100,000.00	$455,000.00
Direct labor	$85,000.00	$150,000.00	$105,000.00	$340,000.00
Applied overhead (50% of direct labor)	$42,500.00	$75,000.00	$52,500.00	$170,000.00
Total Cost added in April	$262,500.00	$445,000.00	$257,500.00	$965,000.00
Total Costs (April 30)	$321,500.00	$507,000.00	$257,500.00	$1,086,000.00
Status on April 30	Finished (Sold)	Finished (Unsold)	In Process

Marcelino company
Schedule of cost of goods manufactured
For the month ended April 30
Particulars	Amount
Direct material	$455,000.00
Direct labor	$340,000.00
Applied overhead (50% of DL Cost)	$170,000.00
Total manufacturing costs	$965,000.00
Add: Beginning WIP	$121,000.00
Total cost of work in process	$1,086,000.00
Less: Ending WIP	$257,500.00
Cost of goods manufactured	$828,500.00

Adjusted cost of goods sold = Unadjusted cost of goods sold + Underapplied overhead
= $321,500 + $5,000 = $326,500
Gross profit = Sales Revenue - Cost of goods sold
=$635,000 - $326,500 = $308,500