Question

WILI I uveliau appier as a peiler Laye VI UTELL IQVUI LUSS. LINESLOprel LUSWII LO LUMPolly JUU VIURI LU by Inventory balances at the beginning of 2018 follow. Bax Materials Inventory Work in Process Inventory Finished Goods Inventory $16,400 5,000 20,900 The following transactions occurred during January (a) Purchased materials on account for $26,100. (b) Issued materials to production totaling $21,500, 90 percent of which was traced to specific Jobs and the remainder of which was treated as Indirect materials. (c) Payroll costs totaling $14,700 were recorded as follows: $10,100 for assembly workers 1,800 for factory supervision 1,000 for administrative personnel 1,800 for sales commissions (d) Recorded depreciation: $5,200 for factory machines. $900 for the copler used in the administrative office. (e) Recorded $1,200 of expired Insurance. Forty percent was Insurance on the manufacturing facility, with the remainder classified as an administrative expense. (f) Paid $4,700 In other factory costs In cash. (9) Applied manufacturing overhead at a rate of 200 percent of direct labor cost. th) Completed all Jobs but one; the job cost sheet for the uncompleted job shows $2.200 for direct materials. $2,100 for direct labor, and $4,200 for applied overhead. (1) Sold Jobs costing $50.200. The revenue eamed on these Jobs was $65,260. Required: 1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: a. Raw Materials Inventory. b. Work In Process Inventory. c. Finished Goods Inventory. d. Cost of Goods Sold. e. Manufacturing Overhead. f. Selling. General, and Administrative Expenses. g. Sales Revenue. 2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance. 3. Determine the amount of over-or underapplied overhead. 4. Compute adjusted gross profit assuming that any over- or underapplied overhead balance is adjusted directly to Cost of Goods Sold.
\

please help solve

Answer 1

1.

Raw Materials Inventory					Work in Process Inventory
Beg. Bal.	16400				Beg. Bal.	5000
(a)	26100	19350	(b)		(b)	19350	46150	(h)
		2150	(b)		(c)	10100
End. Bal.	21000				(g)	20200
					End. Bal.	8500
Finished Goods Inventory					Cost of Goods Sold
Beg. Bal.	20900				Beg. Bal.
(h)	46150	50200	(i)		(i)	50200
End. Bal.	16850				End. Bal.	50200
Manufacturing Overhead					Selling, General, and Administative Expenses
Beg. Bal.					Beg. Bal.
(b)	2150	20200	(g)		(c)	1000
(c)	1800				(c)	1800
(d)	5200				(d)	900
(e)	480				(e)	720
(f)	4700
					End. Bal.	4420
End. Bal.		5870
Sales Revenue
Beg. Bal.
		65260	(i)
End. Bal.		65260

2. Unadjusted gross profit = Sales revenue - Unadjusted Cost of goods sold = $65260 - $50200 = $15060

3. Overhead incurred $14330 - Overhead applied $20200 = Manufacturing Overhead overapplied by $5870

4. Adusted gross profit = Unadjusted gross profit + Overapplied overhead = $15060 + $5870 = $20930