Question

journalize

Wonderama Playgrounds, Inc. manufactures playground equipment for parks and schools. Their business year is the calendar year and they use a job-order cost system for inventory and sales. Wonderama Playgrounds, Inc. manufactures all products in a single production department. An individual job-order cost sheet is maintained for each job. The job-order cost sheet contains accumulated costs for each job, including actual direct materials, actual direct labor, and applied factory overhead. Factory overhead is applied to each job based on 125% of direct labor costs for that job. Wonderama Playgrounds, Inc. marks up all work by 40% of the job cost (sales price = total cost of job x 140%). Since Wonderama Playgrounds, Inc. sells to builders, contractors, school districts and schools, all sales are exempt from state sales tax. All sales are on account and are subject to terms of 2/10, net30 days, FOB Shipping Point. Accounts Payable is used solely for the purchase of direct materials, indirect materials, and factory supplies. All vendors expect full payment within 30 days. Operating expenses, with the exception of any accrued salaries, property taxes, and income taxes, are paid when incurred; all employees are paid at the end of the month. All cash is deposited in the bank when received and all payments are made by check. Following are the transactions for Wonderama Playgrounds, Inc. for January 2020: Jan. 2 Paid Larchmont Advertising Agency $1,363 for designing advertisements to appear in local newspapers in January. Jan. 2 Paid Princely Properties $4,250 for the January rent. Of this amount, 30% is for the office facilities and 70% is for the factory facilities. Jan. 4 Received $30,200.00 on account from customers (no discount allowed). Jan. 5 Sold Job #349, which was finished in December 2019 at a total cost of $39,800, to Happy Jacks Preschool Jan. 7 Received a check from Lawson Corporation for the amount due. Payment was received within the discount period. (Balance due: $9,420.00, before discount) Jan. 9 Paid Nogood Wood Products $8,562.40 in payment of their January 1 balance. Jan. 12 Collected the amount due from Happy Jacks Preschool for the sale on Jan. 5. Jan. 13 Paid Sorenson Plastics Company $12,925.00 in payment on account. Jan. 15 Applied $3,860.00 of direct materials to Job #351 Jan. 15 Applied $10,380.00 of direct labor to Job #351 Jan. 15 Applied factory overhead to Job #351. Jan. 15 Transferred the completed job #351 to Finished Goods. Jan. 16 Received $35,250.00 on account from customers (no discount allowed).

Answer 1

Solution:

Journal Entries: Credit $ Debit $ $1,363.00 Date Acc Title 2-Jan Advertising expense Cash (paid for designing advertisement) $1,363.00 $2,975.00 $1,275.00 (4250*0.7) (4250*0.3) 2-Jan Manufacturing overhead Administration expense Cash (rent paid for factory & office premises) $4,250.00 $30,200.00 4-Jan Cash Accounts Receivable (collection from debtors without discount) $30,200.00 $55,720.00 5-Jan Accounts Receivable Sales revenue (sold the job to Happy Jacks Pre-school) (39800*140%) $55,720.00 (9420*0.98) $9,231.60 $188.40 7-Jan Cash Trade discount Accounts Receivable (collection from debtors with discount) $9,420.00 $8,562.40 9-Jan Accounts payable cash (creditors paid) $8,562.40 (55720*0.98) $54,605.60 $1,114.40 12-Jan Cash Trade discount Accounts Receivable (collection from debtors with discount) $55,720.00 $12,925.00 13-Jan Accounts payable cash (creditors paid) $12,925.00 $3,860.00 15-Jan Work in Process-Job#351 Material (material applied to production) $3,860.00 $10,380.00 15-Jan Work in Process-Job#351 Payroll (labor applied to production) $10,380.00 $12,975.00 (10380*125%) 15-Jan Work in Process-Job#351 Manufacturing Overhead (overhead applied to production) $12,975.00 $27,215.00 15-Jan Finished Goods Inventory Work in Process-Job#351 (Job#351 finished and transferred to FG) $27,215.00 $35,250.00 16-Jan Cash Accounts Receivable (collection from debtors without discount) $35,250.00
Note: if you happy with this solution gives a thums up as your feedback. Thank you??