Question

please help with step 3 and the answer the question.

Steps: Step #1 - Set up Chart of Accounts by en entering the accounts one by one. of Accounts by either importing the chart (Excel file on Canvas) or by Step #2 - Establish the beginning balances by er 1 as the date. in the beginning balances by entering the big journal entry below. Use January Cash 2 Accounts Receivable $ Raw Materials Inventory 4 Goods In Process Inventory 5 Finished Goods Inventory 6 Land n Office Building Factory Building 4 Factory Machinery 10 Office Equipment Accum. Depr. - Fac. Bldg. 12 Accum. Depr.-Fac. Mach. 13 Accum. Depr.-Off. Equip. Accum. Depr.- Office Bldg. Common Stock 16APIC Retained Earnings 290,000 18,000 10,000 15,000 22,000 100,000 96,000 480,000 120,000 24,000 60,000 30,000 12,000 24,000 700,000 100,000 249,000 Note: Job #107 (job cost card/sheet attached) is the only job in Work in Process Inventory on 1/1/X1. Finished Goods Inventory consists of what is left of Job #106 (job cost card/sheet is attached.) A blank job cost card/sheet is attached for Job #108, a job you will begin this month.

Answer 1

Step # 3 :

Date	Account Titles	Debit	Credit
		$	$
1/3	Cash	10,000
	Accounts Receivable		10,000
1/5	Raw Materials Inventory	115,000
	Accounts Payable		115,000
1/12	Goods in Process Inventory	25,000
	Raw Materials Inventory		25,000
1/16	Accounts Payable	115,000
	Cash		50,000
	Notes Payable		65,000
1/18	Goods in Process Inventory	50,000
	Raw Materials Inventory		50,000
1/31	Goods in Process Inventory	106,000
	Cash		106,000
1/31	Factory Overhead	55,000
	Cash		55,000
1/31	Administrative Salaries Expense	3,500
	Sales Salaries Expense	1,500
	Cash		5,000
1/31	Factory Overhead	1,400
	Utilities Expense	350
	Cash		1,750
1/31	Factory Overhead	650
	Property Tax Expense	150
	Property Taxes Payable		800
1/31	Interest Expense ( $ 65,000 x 6 % x 15 / 360)	162.50
	Interest Payable		162.50
1/31	Factory Overhead	1,500
	Depreciation Expense	4,200
	Accumulated Depreciation: Factory Building		1,000
	Accumulated Depreciation : Factory Machinery		500
	Accumulated Depreciation : Office Building		4,000
	Accumulated Depreciation : Office Equipment		200
1/31	Goods in Process Inventory	53,000
	Factory Overhead		53,000
1/31	Finished Goods Inventory	94,000
	Goods in Process Inventory		94,000
1/31	Cash	195,000
	Sales		195,000
1/31	Cost of Goods Sold	106,600
	Finished Goods Inventory		106,600
1/31	Cost of Goods Sold	5,550
	Factory Overhead		5,550

1. $ 75,000 of raw materials were used in production during January.

2. A predetermined overhead rate aids in drawing up a quotation for a job. Unless a job is complete, you do not know the actual amount of overheads incurred.

3. The under-applied overhead could also have been closed out by proportionate debits to Goods in Process Inventory, Finished Goods Inventory and Cost of Goods Sold.

4.

Schedule of Cost of Goods Manufactured and Sold
Raw materials used	$ 75,000
Direct labor used	106,000
Factory overhead applied	53,000
Total manufacturing costs	234,000
Add: Beginning goods in process inventory	15,000
Total cost of goods in process	249,000
Less: Ending work in process inventory	155,000
Cost of Goods Manufactured	94,000
Add: Finished goods inventory	22,000
Cost of goods available for sale	116,000
Less: Ending finished goods inventory	9,400
Cost of Goods Sold ( Unadjusted )	106,600
Factory overhead underapplied	5,550
Adjusted Cost of Goods Sold	112,150