Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials). C. Accrued direct labor cost of $49,000 and indirect labor cost of $20,000 d. Depreciation recorded on factory equipment, $105,000 e. Other manufacturing overhead costs accrued during October. $130,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,200 machine-hours were used in October g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $452.000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 26% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process Post the relevant transactions from above to each account Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $33,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journalen required in the first account field.) View transaction list View journal entry worksheet

Answer 1

Entry Particulars Debit $ Credit $ Raw material inventory account 210,000 Vendor control account 210,000 (Material purchased on account) Work in process inventory accoun 191,000 Raw material inventory account 152,800 Indirect Materials account 38,200 (Direct materials and indirect materials used in production) Work in process inventory accoun 69,000 Accrued direct labour cost account 49,000 Accrued indirect labour cost account 20,000 ( Labour costs accrued accounted in work in process) Manufacturing overhead account 105,000 Accumulated depreciation - Factory equipment a/c 105,000 (Depreciation charged on factory equipment) Manufacturing overhead account 130,000 Accrued manufacturing overhead account 130,000 (Other manufacturing overhead accrued during October) Work in process inventory accoun 5 33,400 Manufacturing overhead account 533,400 (Allocation of manufacturing overhead at $7 per machine hours for 76200 hours) Finished goods account 514,000 Work in process inventory account 514,000 (Transfer of jobs completed during October ) Cost of goods sold account 452,000 Finished goods account 452,000 |(Transfer of jobs sold during October to COGS) Accounts receivable account 569,520 Sales account 569,520 (Accounting of sales of transferred job @ 26% above costs)

533,400 Manufacturing overhead Accumulated depreciation - Work in process Factory equipment a/c 105,000 inventory account Accrued manufacturing overhead 130,000 Ending balance 298,400 533,400 533,400 514,000 312,400 Work in process inventory Beginning balance 33,000 Finished goods account Raw material inventory account 152,800 Ending balance Indirect Materials account 38,200 Accrued direct labour cost account 49,000 Accrued indirect labour cost accoy 20,000 Manufacturing overhead account | 533,400 826,400 826,400