Question

Exercise 3-2 Prepare T-Accounts [LO3-2, LO3-4]

Jurvin Enterprises recorded the following transactions for the just completed month. The company had no beginning inventories.

1. $75,700 in raw materials were purchased for cash.
2. $71,400 in raw materials were used in production. Of this amount, $65,500 was for direct materials and the remainder was for indirect materials.
3. Total labor wages of $150,200 were incurred and paid. Of this amount, $133,700 was for direct labor and the remainder was for indirect labor.
4. Additional manufacturing overhead costs of $126,400 were incurred and paid.
5. Manufacturing overhead of $119,800 was applied to production using the company’s predetermined overhead rate.
6. All of the jobs in process at the end of the month were completed.
7. All of the completed jobs were shipped to customers.
8. Any underapplied or overapplied overhead for the period was closed to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts.
2. Determine the adjusted cost of goods sold for the period.

Answer 1

T ACCOUNTS

RAW MATERIAL inventory

Cash	$75700	work in process	$65500
		Manufacturing OVERHEAD	$5900
		Balance	$4300

Work in process

RAW MATERIAL inventory	$65500	finished goods,(balance)	$319000
Cash	$133700
Manufacturing OVERHEAD	$119800	balance wip	0

  finished goods

Wip	$319000
		Cost of goods sold	$319000

  Manufacturing OVERHEAD

RAW MATERIAL inventory	$5900	work in process	$119800
Wages payable	$16500
Cash	$126400	balance (underapplied)	$29000

  cost of goods sold

Finished goods	$319000
		Balance	$319000

Cash

		Raw material inventory	$65500
		Work in process	$133700
Balance	$325600	Manufacturing OVERHEAD	$126400

2). Compute adjusted cost of goods sold

Particular	amount ($)
Cost of goods sold	319000
+Underapplied Manufacturing OVERHEAD	29000
Adjusted cost of goods sold	348000

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