Question

Required information The following information applies to the questions displayed below] Widmer Watercraft's predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company's production activities during May 2017 follows. a. Purchased raw materials on credit, $240,000 b. Materials requisitions record use of the following materials for the month Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used $ 49,000 33,000 19,800 22,600 6,600 131,000 20,000 $151,000 c. Paid $15.750 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total $ 12,200 10,600 37,990 39,000 3,600 103,300 26,500 $129,820

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Answer 1

Answer -

1. Journal entries to record the events and transactions a through i.

Transaction	General Journal	Debit	Credit
a.	Raw materials inventory	$240000
	Accounts payable		$240000
b.	Work in process inventory	$131000
	Factory overhead	$20000
	Raw materials inventory		$151000
c.	Factory overhead	$15750
	cash		$15750
d.	Work in process inventory	$103300
	Factory overhead	$26500
	Cash		$129800
e.	Work in process inventory	$178200
	Factory overhead		$178200
f.	Finished goods inventory	$358700
	Work in process inventory		$358700
g(1).	Accounts receivable	$530000
	Sales		$530000
g(2).	Cost of goods sold	$219100
	Finished goods inventory		$219100
h.	Factory overhead	$154000
	Accumulated depreciation-Factory building		$70000
	Accumulated depreciation-Factory equipment		$38000
	Prepaid insurance		$10000
	Property taxes payable		$36000
i.	Work in process inventory	$28400
	Factory overhead		$28400

Calculation:

e. Factory overhead:

As per given information, predetermined overhead rate is 200% of direct labor.

So,

Job 136:

Applied overhead = Direct labor * 200% = $12200 * 200% = $24400

Job 138:

Applied overhead = Direct labor * 200% = $37900 * 200% = $75800

Job 139:

Applied overhead = Direct labor * 200% = $39000 * 200% = $78000

Therefore,

Factory overhead = $24400 + $75800 + $78000 = $178200

f. Finished goods inventory:

Job 136:

= Direct materials + Direct labor + Overhead

= $49000 + $12200 + $24400

= $85600

Job 138:

= Direct materials + Direct labor + Overhead

= $19800 + $37900 + $75800

= $133500

Job 139:

= Direct materials + Direct labor + Overhead

= $22600 + $39000 + $78000

= $139600

So,

Finished goods inventory for Job 136, Job 138 and Job 139:

= $85600 + $133500 + $139600

= $358700

g(2). Cost of goods sold:

Job 136:

= Direct materials + Direct labor + Overhead

= $49000 + $12200 + $24400

= $85600

Job 138:

= Direct materials + Direct labor + Overhead

= $19800 + $37900 + $75800

= $133500

So,

Cost of goods sold for Job 136 and Job 138:

= $85600 + $133500

= $219100

i. Factory overhead:

Job 137:

Applied overhead = Direct labor * 200% = $10600 * 200% = $21200

Job 140:

Applied overhead = Direct labor * 200% = $3600 * 200% = $7200

Therefore,

Factory overhead = $21200 + $7200 = $28400

2. T-accounts:

Raw materials inventory
a.	$240000	$151000	b.
End. bal.	$89000

Factory overhead
b.	$20000
c.	$15750	$178200	e.
d.	$26500	$28400	i.
h.	$154000
End. bal.	$9650

Cost of goods sold
g.	$219100
End. bal.	$219100

Work in process inventory
b.	$131000	$358700	f.
d.	$103300
e.	$178200
i.	$28400
End. bal.	$82200

Finished goods inventory
f.	$358700	$219100	g.
End. bal.	$139600

3. Report of Job Costs:

Report of Job Costs
Work in process inventory:
Job 137	$64800
Job 140	$17400
Balance	$82200
Finished goods inventory:
Job 139	$139600
Balance	$139600
Cost of goods sold:
Job 136	$85600
Job 138	$133500
Balance	$219100

Calculation:

Job 137:

= Direct materials + Direct labor + Overhead

= $33000 + $10600 + $21200

= $64800

Job 140:

= Direct materials + Direct labor + Overhead

= $6600 + $3600 + $7200

= $17400

Balance:

= $64800 + $17400

= $82200