Question

Job Cost Journal Entries Prior to the beginning of 2019, Lowe Company estimated that it would incur $176,000 of manufacturing overhead cost during 2019, using 16,000 direct labor hours to produce the desired volume of goods. On January 1, 2019, beginning balances of Materials Inventory, Work in Process Inventory, and Finished Goods Inventory were $28,000, $-0-, and $43,000, respectively. Required Prepare general journal entries to record the following for 2019: a. Purchased materials on account, $39,000. Description Debit Credit Support b. Of the total dollar value of materials used, $31,000 represented direct material and $11,000 indirect material. Debit Credit Description Work in process inventory c. Determined total factory labor, $135,000 (15,000 hrs. @ $9/hr.). d. Of the factory labor, 80% was direct and 20% indirect. Debit Credit Description Work in process inventory e. Applied manufacturing overhead based on direct labor hours to work in process. Description Debit Credit f. Determined actual manufacturing overhead other than those items already recorded, $92,000. (Credit Accounts Payable.)

Answer 1

Credit Remarks and Workings Debit $39,000 a) Raw $39,000 (To record raw materials purchased on account) $31,000 $11,000 $42,000 (To record raw materials used in production) $135,000 Trans. # General Journal Raw Materials Inventory Accounts Payable b) Work in Process Inventory Factory overhead Raw Materials Inventory Factory Labor Cost Cash Work in Process Inventory Factory overhead Factory Labor Cost e) Work in Process Inventory Factory overhead Factory overhead Accounts Payable $135,000 $108,000 $27,000 (To record labor cost paid) ($135000 x 80%] ($135000 x 20%] (To record labor costs used in production) [15,000 hours x ($176,000 / 16,000 hours)] (To record mfg. overhead applied to the production) $135,000 $165,000 $165,000 $92,000 $92,000 |(To record factory overhead costs incurred) Trans. # Debit General Journal Work in Process Inventory Finished Goods Inventory Credit $272,000 $258,000 Remarks and Workings [$0 + $31000+ $108000 + $ 165000 - $32,000 -->Ref: Entries (b), (d) & (e)] |$43,000 + $272000 - $57,000 --> Beg. Bal. + Trf. from WIP - End. Bal.] Credit Trans. # General Journal Factory Overhead Cost of Goods Sold Debit $35,000 h) Remarks and Workings [Ref: Workings below] |(To adjust over-applied overhead to cost of goods sold) $35,000