Question

Instructions The following transactions occurred during the month of April for Nelson Company: Apr. 3 Purchased materials costing $4,610 on account. Requisitioned materials totaling $4,800 for use in production, $3,170 for Job 518 and the remainder for Job 519. 14 15 25 Recorded 65 hours of direct labor on Job 518 and 90 hours on Job 519 for the month. Direct laborers are paid at the rate of $14 per hour. Applied overhead using a plantwide rate of $6.20 per direct labor hour. Incurred and paid in cash actual overhead for the month of $973. Completed and transferred Job 518 to Finished Goods, Sold on account Job 517, which had been completed and transferred to Finished Goods in March, for cost ($2,770) plus 25%. (Enter this as two transactions.) 27 30 Required: 1. Prepare journal entries for transactions from April 1 through 25. 2. (a) Prepare job-order cost sheets for Jobs 518 and 519. (b) Prepare journal entries for transactions on April 27 and 30. 3. Prepare a schedule of cost of goods manufactured for April. Assume that the beginning balance in the raw materials account was $1,025 and that the beginning balance in the work-in-process account was zero.

Answer 1

1 Credit Debit $4,610 $4,610 $4,800 $4,800 $2,170 Date Account Titles and Explanations April 1 Raw materials Accounts payable (To record material purchase on account) April 3 Work in process Raw materials (To record material put into production) April 14 Work in process Wages payable (To record labor put into production) April 15 Work in process Manufacturing overhead (To record manufacturing overhead applied) April 25 Manufacturing overhead Cash (To record manufacturing overhead paid in cash) $2,170 $961 155*$6.2 $961 $973 $973 Job Order Cost Sheets 2 a) Job 518 $3,170 $910 $403 $4,483 Job 519 $1,630 $1,260 $558 $3,448 Direct material Direct labor Applied overhead Current Manufacturing cost Add: Beginning Work in process Total Manufacturing cost Less: Ending work in process Cost of goods manufactured $4,483 $0 $4,483 $3,448 $3,448 $0 Credit Debit $4,483 $4,483 $3,463 2 b) Date General Journal April 27 Finished goods Work in process (To record transfer of completed Job to FG) April 30 Accounts receivable Sales (To record sale of Job 517) April 30 Cost of goods sold Finished goods (To record cost of goods sold for Job 517) $2,770*125% $3,463 $2,770 $2,770 3) Nelson Company Schedule of Cost of Goods Manufactured For the Month Ended April 20 Direct materials Used Beginning Raw Materials inventory $1,025 Purchases of Raw materials $4,610 Raw material available for use $5,635 Ending Raw materials inventory $835 Raw material used Direct labor Manufacturing overhead Current Manufacturing costs Total Manufacturing Costs Less: Ending Work in Process Inventory Cost of Goods Manufactured $4,800 $2,170 $961 $7,931 $7,931 $3,448 $4,483