Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October: a. Raw materials purchased on account, $211,000. b. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials). C. Accrued direct labor cost of $48,000 and indirect labor cost of $20,000. d. Depreciation recorded on factory equipment, $105,000. e. Other manufacturing overhead costs accrued during October, $129,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine- hour. A total of 76,300 machine-hours were used in October. g. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 34% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000. Complete this question by entering your answers in the tabs below. Required Required Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 9 Raw materials purchased on account, $211,000. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry View general journal

Answer 1

Polaris Company Journal Enteries Trans. Particulars a. Raw Materials a/c Dr. To Accounts Payable (Raw materials purchased on account) Debit in $ Credit in $ 211000 211000 Manufacturing Overhead 38200 f 686700 20000 105000 129000 394500 686700 686700 Bal. b. Dr. Dr. 152800 38200 Work in Process a/c Manufacturing Overhead a/c To Raw Materials (Raw materials used in prodn.) 191000 Beg Bal. 512000 48000 20000 Work in Process a/c Manufacturing Overhead a/c Dr. To Salaries and wages payable (To record labor cost) Work in Process 36000 g 152800 48000 686700 Bal. 923500 68000 411500 923500 d. Dr. 105000 Manufacturing Overhead a/c To Accum. Depreciation (To record depreciation) 105000 e Dr. 129000 Manufacturing Overhead a/c To Accounts Payable (Manufacturing cost accrued) 129000 686700 Work in Process a/c Dr. To Manufacturing Overhead (To Manufacturing overhead)76300 x 9 = 686700 686700 512000 Finished goods a/c Dr. To Work in process (Work in process trfd. To Finished goods) 512000 h1. 452000 Cost of goods sold a/c Dr. To Finished goods (To record Cost of goods sold) 452000 h2. 605680 Accounts Receivable a/c Dr. To Sales (Sales on account) 452000 x 1.34 = 605680 605680