Question

Sultan, Inc. manufactures goods to special order and uses a job order cost system. During its first month of operations, the following selected transactions took place

a. $37,000 b. $ 2,200 5,700 7,100 1,700 1,350 C. Materials purchased on account. Materials issued to the factory: Job 101 ....... Job 102 Job 103. Job 104 For general use in the factory... Factory wages and salaries earned: Job 101 Job 102 Job 103 Job 104. For general work in the factory Distributed the payroll in (c). Miscellaneous factory overhead costs on account. Depreciation of $2,000 on the factory machinery recorded. Factory overhead allocated as follows: Job 101... $ 2,700 6,800 9,200 2,100 2,250 d. . $ 2,400 f. g. Job 102 Job 103. $ 1,200 2,000 3,800 1,000 h. Job 104. Jobs 101, 102, and 103 completed. Jobs 101 and 102 shipped to the customer and billed at $39,000. i.

REQUIRED:

1) Prepare journal entries to record the transactions.

2) Compute the ending balance in Work in Process.

3) Compute the ending balance in Finished Goods.

Answer 1

Journal Entry Serial no Account Title Debit ($) Credit ($) a. 37000 Materials To Account payable 37000 b. Work in progress-Material Factory Overhead To Material 16700 1350 18050 C. Work in progress-Labor Factory Overhead To Factory payroll 20800 2250 23050 d. 23050 Factory payroll To Cash 23050 e. 2400 Factory overhead To Account payable 2400

f. 2000 Factory overhead To Accumulated depreciation 2000 g. 8000 Work in Progress To Factory overhead 8000 h. 40700 Finished Goods To Work in progress 40700 i. 39000 Account receivable To Sales 39000

Job no Billed Completed 6100 39000 14500 Job 101 Job 102 Job 103 Total 20100 $40700 $39000 Computation of Ending WIP Amount ($) 16700 20800 Added to wip Direct Material Direct Labor Factory Overhead Total Transferred to finished goods Balance (represented by cost of job104) 8000 45500 40700 $4800

Computation of Ending Balance of Finished Goods Added to finished goods Less: Cost of goods sold Balance (represntated by cost of job103) $40700 $20600 $20100