Question

In Class Problem - Chapter 2 On April 1st, Grace's Printing has Work in Process inventory of $2,700, Raw Materials inventory is $1,500 and Manufacturing Overhead has a $300 credit balance. Subsidiary data for WIP on 4/1 includes: Jobs by Customer Jane Kelley Direct Materials $1,000 Direct Labor Manufacturing Overhead $1,000 $700 Write the journal entries that are required when: Accumulating cost entries: 1) Raw materials of $2,000 are purchased on account. 2) $1,200 is paid for repairs on factory equipment. 3) Factory rent of $1,000 is paid. 4) $4,700 is paid to factory employees for payroll. Assigning cost entries: 5) A review of materials requisition slips during April shows: Jobs by Customer Material Requisition Slip Jane Kelley $1,000 Lexis Smith 1,500 2,500 Indirect materials 300 Total $2.800 6) A review of time tickets during April shows: Jobs by Customer Time Tickets Jane Kelley $2,100 Lexis Smith 1,900 4,000 Indirect labor 700 Total $4,700 7) Estimated manufacturing overhead for the year was $70,000 and overhead is applied based on direct labor dollars which were estimated at $100,000 for the year. Give the journal entry and note the predetermined overhead rate. Storage and Selling entries: 8) The print job for Jane Kelley is completed during April. 9) Jane Kelley's print job is sold on April 30th at cost plus 75%. Manufacturing Overhead Clearing Entry: 10) Pretend that it is year end and make the entry to clear manufacturing overhead.

Answer 1

Journal Entries:
Date	Accounts Title	Debit $	Credit $
1	Raw Material	2000
	Accounts Payable		2000
	(RM purchsed on credit)
2	Manuf. Overhead	1200
	Cash		1200
	(repairs for factory paid)
3	Manuf. Overhead	1000
	Cash		1000
	(Rent for factory paid)
4	payroll	4700
	Cash		4700
	(factory labor paid)
5	WIP	2500
	Manuf. Overhead	300
	Raw Material		2800
	(RM applied to production)
6	WIP	4000
	Manuf. Overhead	700
	Payroll		4700
	(Labor applied to production)
7	WIP	2800		(70000*4000/100000)
	Manuf. Overhead		2800
	(overhead applied to production)
	Predetermined OH rate = 70000/100000
8	FG Inventory	7270
	WIP		7270
	(FG transferred from WIP)
Jane Kelley	DM	DL	OH	Total
OB	1000	1000	700	2700
during April	1000	2100	1470	4570
TOTAL				7270
Date	Accounts Title	Debit $	Credit $
9	Cash	12722.5		7270*1.75
	Sales Revenue		12722.5
	(Jane Kelley job sold)
9	COGS	7270
	FG Inventory		7270
	(cost of sales recorded)
10	COGS	400
	Manuf. Overhead		400
	(Closure of overhead to COGS)
	(actual OH 3200 - applied OH 2800=
	Under applied OH 400)