Question

Custom Cabinetry has one job in process (Job 120) as of June 30, at that time, its job cost sheet reports direct materials of $6,800, direct labor of $4,400, and applied overhead of $3,740. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on account) for $26,000, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July July Product Costs Direct materials Direct labor Overhead applied Job 120 $1,900 3,800 Job 121 $8,200 5,400 ? Job 122 $3,400 3,300 ? Total $13,500 12,500 > 1. Prepare journal entries for the following in July a. Direct materials used in production b. Direct labor used in production c. Overhead applied d. The sale of Job 120. e. Cost of goods sold for Job 120 2. Compute the July 31 balances of the Work In Process Inventory and the Finished Goods Inventory accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries for the above transactions in July, View transaction list Journal entry worksheet < 2 3 5

Answer 1

1
Transaction	General Journal	Debit	Credit
a	Work in process inventory	13500
	Raw materials inventory		13500
b	Work in process inventory	12500
	Factory wages payable		12500
c	Work in process inventory	10625		=12500*85%
	Factory overhead		10625
d	Accounts Receivable	26000
	Sales		26000
e	Cost of goods sold	23870		=(6800+4400+3740)+1900+3800+(3800*85%)
	Finished goods inventory		23870
2
	Work in Process	Finished goods
Job #	Job 122	Job 121
Direct materials	3400	8200
Direct labor	3300	5400
Overhead	2805	4590
Total cost	9505	18190