Question

Entries for Costs in a Job Order Cost System

Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

Materials purchased on account, $599,490.

Materials requisitioned, $503,570, of which $65,460 was for general factory use.

Factory labor used, $617,470, of which $117,320 was indirect.

Other costs incurred on account for factory overhead, $143,880; selling expenses, $221,810; and administrative expenses, $131,890.

Prepaid expenses expired for factory overhead were $27,580; for selling expenses, $23,380; and for administrative expenses, $16,790.

Depreciation of factory equipment was $27,580; of office equipment, $40,770; and of office building, $80,330.

Factory overhead costs applied to jobs, $341,710.

Jobs completed, $791,330.

Cost of goods sold, $767,350.

Required:

Journalize the entries to record the summarized operations. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Materials purchased on account, $599,490.

Entry	Description	Debit	Credit
a.

b. Materials requisitioned, $503,570, of which $65,460 was for general factory use.

Entry	Description	Debit	Credit
b.

c. Factory labor used, $617,470, of which $117,320 was indirect.

Entry	Description	Debit	Credit
c.

d. Other costs incurred on account for factory overhead, $143,880; selling expenses, $221,810; and administrative expenses, $131,890.

Entry	Description	Debit	Credit
d.

e. Prepaid expenses expired for factory overhead were $27,580; for selling expenses, $23,380; and for administrative expenses, $16,790.

Entry	Description	Debit	Credit
e.

f. Depreciation of factory equipment was $27,580; of office equipment, $40,770; and of office building, $80,330.

Entry	Description	Debit	Credit
f.

g. Factory overhead costs applied to jobs, $341,710.

Entry	Description	Debit	Credit
g.

h. Jobs completed, $791,330.

Entry	Description	Debit	Credit
h.

i. Cost of goods sold, $767,350.

Entry	Description	Debit	Credit
i.

Check My Work

Answer 1

Date	Particulars	$	$
a.	Debit Direct Material	599,490
	Credit Cash		599,490
	(Being material purchased on account for $599,490)
b.	Debit Work in process	438,110
	Debit Factory overhead	65,460
	Credit Direct Material		503,570
	(Being material issued for production for
c.	Debit Work in Process	499,150
	Debit Factory Overhead	117,320
	Credit Wages payable or cash		616,470
	(Being facotry used labour for
d.	Debit Factory overhead	143,880
	Debit Selling overhead	221,810
	Debit Administrative Overhead	131,890
	Credit Accounts payable or Cash		497,580
	(Being other overhead expenses incured )
e.	Debit Fctory overhead	27,580
	Debit Selling overhead	23,380
	Debit Administrative overhead	16,790
	Credit Prepaid expenses		67,750
	(Being prepaid expenses expired)
f.	Debit Administrative overhead	121,100
	Debit Fctory overhead	27,580
	Credit Accoumulated depreciatio		148,680
	(Being administration overhead-depreciation for office building $ 80,330 and office equipment $40,770, factory overhead-depreciation on factory equipment $ 27,580 is applied.)
g.	Debit Work in process	341,710
	Credit Fctory overhead		341,710
	(Being factory overhead cost applied to job, $341,710)
h.	Debit Finished Goods Inventory	791,330
	Credit Work in process		791,330
	(Being jobs completed, 791,330)
i.	Debit Cost of goods sold	767,350
	Credit Finished Goods Inventory		767,350
	(Being cost of goods sold,$767,350)