Question

If someone could do this quickly that'd be very helpful I have until 11:59 central time to finish it and I'm a little stuck.

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. All of the company's transactions with customers, employees, and suppliers are conducted in cash; there is no credit. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $88,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Work in process Finished goods $ 10,600 $ 4,600 $ 8,000 During the year, the following transactions were completed: a. Raw materials purchased for cash, $167,000. b. Raw materials requisitioned for use in production, $143,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect). C. Costs for employee services were incurred as follows: Direct labor Indirect labor Sales commissions Administrative salaries $ 163,000 $308,800 $ 23,000 $ 45,000

Answer 1

	predetermined overhead rate =			88000/40000
				220%
	Accounting titles & Explanations					debit	Credit
a)	Raw materials inventory					167,000
	cash						167,000
b)	work in process inventory					121,000
	Factory overhead					22,000
	Raw materials inventory						143,000
c)	Work in process inventory					163,000
	Factory overhead					308,800
	Sales commission expense					23,000
	Salaries expense					45,000
	cash						539,800
d)	Factory overhead					13,300
	Rent expense					5,100
	cash						18,400
e)	Factory overhead					13,000
	cash						13,000
f)	Advertising expense					11,000
	cash						11,000
g)	Factory overhead					16,000
	Depreciation expense					6,000
	Accumulated depreciation						22,000
h)	work in process inventory					358600
	Factory overhead		(163000*220%)				358600
i)	finished goods inventory					226,000
	work in process inventory						226,000
j)	Cash					498,000
	Sales revenue						498,000
	cost of goods sold					220,000
	finished goods inventory						220,000
	T-Accounts
	Raw materials				Work in process
Bal	10,600				Bal	4,600
a)	167,000	143,000	b)		b)	121,000	226,000	i)
					c)	163,000
Bal	34,600				h)	358600
					Bal	421,200
					Manufacturing overhead
	Finished goods				beg.bal	0
Bal	8,000				b)	22,000	358600	h)
i)	226,000	220,000			c)	308,800
					d)	13,300
Bal	14,000				e)	13,000
					g)	16,000
					Bal	14,500
	cost of goods sold
Beg.bal	0
j)	220,000
3a)	Manufacturing overhead is under applied
3B)	Journal entry
	Account titles & Explanations					Debit	Credit
	Cost of goods sold					14,500
	Factory /MOH						14,500
4)		Income Statement
	Sales						498,000
	less : cost of goods sold			(220000+14500)			234,500
	Gross margin						263,500
	less:Selling & administrative expense
	Sales comission					23,000
	Administrative salaries					45,000
	Rent exepense					5,100
	Advertising expense					11,000
	Depreciation expense					6,000	90,100
	Net operating income						173,400