Question

Ehrling Brothers Company makes jobs to customer order. During the month of July, the following occurred: Materials were purchased on account for $45,670. Materials totaling $40,990 were requisitioned for use in producing various jobs. Direct labor payroll for the month was $22,400 with an average wage of $14 per hour. Actual overhead of $9,020 was incurred and paid in cash. Manufacturing overhead is charged to production at the rate of $5.50 per direct labor hour. Completed jobs costing $58,000 were transferred to Finished Goods. Jobs costing $59,000 were sold on account for $73,750. Make the entry to record the revenue from the sale first, followed by the entry to record the cost of the jobs. Beginning balances as of July 1 were: Materials Inventory $1,200 Work-in-Process Inventory 3,400 Finished Goods Inventory 2,630 Required: 1. Prepare the journal entries for the preceding events. a. b. c. d. e. f. g (1). g (2). 2. Calculate the ending balances of: a. Materials Inventory $ b. Work-in-Process Inventory $ c. Overhead Control $ d. Finished Goods Inventory $?

Answer 1

Transactions	General Journal	Debit	Credit
a)	Materials inventory	45,670
	Accounts payable		45,670
	(to record material purchase on account)
b)	Work in process inventory	40,990
	Materials inventory		40,990
	(to record materials used in production)
c)	Work in process inventory	22,400
	Wages and salaries payable		22,400
	(to record direct labor used in production)
d)	Overhead control	9,020
	Cash		9,020
	(to record overhead paid in cash)
e)	Work in process inventory	8,800
	Overhead control		8,800
	(to record overhead applied to production)
f)	Finished goods inventory	58,000
	Work in process inventory		58,000
	(to record completed goods transferred to finished goods)
g (1)	Accounts receivable	73,750
	Sales revenue		73,750
	(to record sales on account)
g (2)	Cost of goods sold	59,000
	Finished goods inventory		59,000
	(to record cost of goods sold)

Materials Inventory
Beg.Bal	1,200
a)	45,670	40,990	b)
End Bal	5,880
Work in Process Inventory
Beg.Bal	3,400
b)	40,990
c)	22,400
e)	8,800	58,000	f)
End Bal	17,590
Overhead control
d)	9,020	8,800	e)
End Bal	220
Finished goods Inventory
Beg. Bal	2,630
f)	58,000	59,000	g (2)
End. Bal	1,630