Question

Check my work Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $7,900, direct labor of $2,800, and applied overhead of $2,520. Custom Cabinetry applies overhead at the rate of 90% of direct labor cost. During July, Job 120 is sold (on account) for $27,000, 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 Job 120 Direct materials $1,900 Direct labor 2,500 Overhead applied Job 121 $8,600 4,000 ? Job 122 $2,600 3,300 ? Total $13,100 9,800 ? 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 1 2 3 4 5 > Record the entry to assign direct materials to job. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal

Answer 1

Answer

Required 1:

	Custom Cabinetry
	Journal Entries
Txn	General Journal	Debit	Credit
a	Work in progress Inventory Job 120 A/c Dr.	1,900
	Work in progress Inventory Job 121 A/c Dr.	8,600
	Work in progress Inventory Job 122 A/c Dr.	2,600
	To Direct Materials Inventory A/c		13,100
	( Direct material used in Production )
b	Work in progress Inventory Job 120 A/c Dr.	2,500
	Work in progress Inventory Job 121 A/c Dr.	4,000
	Work in progress Inventory Job 122 A/c Dr.	3,300
	To Wages Payable A/c		9,800
	( Direct material used in Production )
c	Work in progress Inventory Job 120 A/c Dr.	2,250
	Work in progress Inventory Job 121 A/c Dr.	3,600
	Work in progress Inventory Job 122 A/c Dr.	2,970
	To Factory Overhead A/c		8,820
	( Overhead applied )
d	Accounts Recevable Dr.	27,000
	To Sales Revenue A/c		27,000
	( Job 120 sold on account )
e	Cost of Goods Sold Account Dr.	19,870
	To Finished Goods Inventory A/c		19,870
	( Entry for Cost of Goods sold for job 120)

Required 2

	Work in Progress	Finished Goods
Job #	122	121
Direct Materials	$ 2,600	$ 8,600
Direct Labour	3,300	4,000
Overhead applied ( 90% of direct labour cost )	2,970	3,600
Total Cost	8,870	16,200

Working Notes:

1.

Cost of Goods sold	Job 120
Beginning Work in progress Balance
Direct material used	7,900
Direct Labour used	2,800
Overhead applied	2,520
Current Product Cost:
Direct material used	1,900
Direct Labour used	2,500
Overhead applied ( 90% of Direct labour cost )	2,250
Total cost	19,870

2.

Overhead applied	Job 120	Job 121	Job 122	Total
Direct Labour used	2,500	4,000	3,300
Overhead applied ( 90% of Direct labour cost )	2,250	3,600	2,970	8,820

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