Question

Costa Company specializes in custom made furniture for a select clientele. Record September journal entries for Costa Company based on the following transactions. Omit explanations Sept. 1 Parchased $10,000 of raw materials on account Sept. 5 Issued $6.500 of raw materials to production and $1,000 of raw materials were used as overhead Sept 10 Completed several items of furniture with a total cost of $15,000 Sept. Sold several items of furniture with a cost of $12,000 20 The items sold for $16,000 total. Sept 30 Direct labor in September amounted to 57,200 30 Factory utilities and depreciation on factory equipment incurred in September amounted to $500 and $750 respectively, Sept The company applies overhead at the rate of 19 per direct labor hour. This month, the company recorded 360 direct labor hours. Record the application 30 of overhead For the toolbar, press ALT+F10 (PC) or ALT+FN+F 10 (Mac). TTTT Paragraph Arial 3 (12pt) EET Sept

Answer 1

Ans. Journal Entries in the books of Costa company

Sept 1 . Raw Material Inventory A/c Dr. 10000

To Accounts Payable A/c 10000

Sept 5 Work in progress A/c Dr. 6500

To Raw Material inventory A/c 6500

   Manufacturing Overhead A/c Dr. 1000

To Raw material inventory A/c 1000

Sept. 10 Finished Goods Inventory A/c Dr. 15000

To Work in Progress inventory A/c 15000

Sept 20 Cost of Goods A/c Dr. 12000

To Finished Goods inventory A/c 12000

Sales Account A/c Dr. 16000

To Cost of goods A/c 12000

To P&L (profit ) A/c 4000

Sept. 30 Work in Progress A/c Dr. 7200

To Direct Labour A/c 7200

Sept. 30 Manufacturing overhead A/c Dr. 1250

To Depreciation A/c 750

To Factory utilities A/c 500

Sept 30. Work in progress A/c Dr. 6840

To Manufacturing overhead A/c 6840   

(19X360)