Question

Clancy Co's March 31 inventory of raw materials is $190 000 Raw materials purchases in April are $740,000, and factory payroll cost in April is $649.000 Overhead costs incurred in April are indirect materials. $118.000 indirect labor, $89.000 factory rent, $112.000 factory Utilities. $63.000, and factory equipment depreciation $73.000. The predetermined overhead rate is 80% of direct labor cost. Job 306 is sold for $1.230,000 cash in April Costs of the three jobs worked on in April follow Job 386 Job 387 Job 38 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead $ 73,00 64,000 51,20 $100,00 40.000 32,832 179,800 173,000 286,000 260,000 $144, 127 800 Status on April 30 Finished sold) Finished Cunsold In process Complete this question by entering your answers in the tabs below. Requirement General Journal General Ledger Ta Balance Job Costs Cost of Goods MO Gross Profit General Journal tab - Prepare journal entries to record the transactions of Clancy company during the month of April Job Costs tab - Calculate the total cast, and account dassification for each Job worked on during April Cost of Goods Manufactured tab - Prepare a schedule of cost of goods manufactured for Clancy Company during the month of April Gross Profit tab. Calculate the gross profit on the sale of jobs) during April

Answer 1

1). Journal entries for the month of April

1.a Raw material inventory A/c Dr 740000/-

To Accounts payable A/c 740000/-

(Beeing rawmaterial purchage on credit)

2.b. Work in progress inventory A/c Dr 609000/-

To Raw material inventory A/c 609000/-

(Beeing consumption of Direct raw meterial)

3.c.Wages control A/c Dr 560000/-

To cash A/c 560000/-

(Beeing direct wages paid in cash)

Work in progress inventory A/c Dr 560000/-

To Wages control A/c 560000/-

(Beeing indirect wages chrged to production)

4.d. Wages control A/c Dr 89000/-

To cash A/c 89000/-

(Beeing indirect wages paid in cash)

Work in progress inventory A/c Dr 89000/-

To Wages control A/c 89000/-

(Beeing indirect wages chrged to production)

5.e. Work in progress inventory A/c Dr 448000/-

To Factory overhead Control A/c 448000/-

(Beeing Factory overhead charged to production)(Dw*80%=560000*80%=448000)

6.f1. Factory overhead Control A/c Dr 118000/-

To Raw material inventory A/c 118000/-

(Beeing cost of indirect rawmaterial used)

7.f2.Facory overhead  A/c   Dr 63000/-

To cash A/c 63000/-

(Beeing Factory utility paid in cash)

8.f3. Facory overhead A/c Dr 73000/-

To Factory equipment A/c 73000/-

(Beeing depretiation recorded on equipment)

9.f4. Factory overhead A/c Dr 112000/-

To cash A/c 112000/-

(Beeing factory rent paid in cash)

10.g. Finished goods inventory A/c Dr 1605600/-

To Work in progress inventory A/c 1605600/-

(Beeing 306, 307 jobs finished goods transfer)

11.h. Cost of goods sold A/c Dr 678600/-

To Finished goods inventory A/c 678600/-

(Beeing 306 job finished transfer to cgs)

12.i. Cash A/c     Dr 1230000/-

To Sales A/c 1230000/-

(Beeing Job 306 sales value accounted)

13.j. Cost of goods sold A/c Dr 7000/-

To Factory overhead control A/c 7000/-

(Beeing under recovery of overhead charged to CGS)

General ledgers

S.no. Date debit credit balance

Cash A/c

31 march 670000

1 April 30 1230000 ----- 1900000

2    April 30 -------- 118000 1782000

3 April 30 ------- 649000 1133000

4 April 30 ----- 112000 1021000

5 April 30 -------- 63000 958000

Rawmaterial A/c

march 31 ------- ----- 190000

1 april 30 740000 ------ 930000

2 April 30 118000 --------- 1048000

3 April 30 --------- 609000 439000

4   April 30 -------- 118000 321000

Facory Equipment A/c

march 31 ------ ------- 730000

Accounts payable A/c

march 31 ----- ------ 89000

1 April 30 ------- 740000 829000

Paid in Capital in Excess of common stock

March 31 ------- -------- 172000

Accounts Receivable A/c

March 31 ------- ------ 268000

Work in progress A/c

March 31 ------ ------ 361200

1 April 30 560000 ------- 921200

2 April 30 448000 ------- 1369200

3 April 30 609000 --------- 1978200

4   April 30 ---------- 1605600 372600

Finished Goods A/c

1 April 30    1605600     -------- 1605600

2 April 30 -------- 678600 927000

Cost of goods sold A/c

1   April 30 678600 ------- 678600

2   April 30 7000 ------- 685600

3 April 30 ---------- 685600 --------

Accumulated Depretiation -Factory Equipment a/c

March 31 --------- -------- 219000

1 April 30 73000 -------- 292000

Cpaital A/c

March 31 ------- ------ 272000

Retained Earnings a/c

March 31 -------- ------- 1467200

1   April 30 --------- 1230000 2697200

2 April 30 685600 --------- 2011600

3. Clancy company Trail balance as on april 30

Accounts Titile Debit Credit

Cash a/c 958000 -------

Accounts Receivable 268000 ---------

Raw material Inventory 321000 -------

Work in progress Inventory 372600 ------

Finished goods Inventory 927000 ---------

Factory Equipment 730000 --------

Accumulated Depretiation --------- 292000

Accounts Payable -------- 829000

Common stock --------- 272000

Paid in capital excess of common stock --------- 172000

Retained Earnings --------- 2011600

Total 3576600 3576600

4. Calculation of Over head applied for Jobs for April

Particulars Job 306 Job 307 Job 308 Total

Direct wages 173000 260000 127000 560000

Applied Factory overhead 138400 208000 101600 448000

(80% on direct wages)

Transfer to Cost of goods sold Finished goods Work in progress

5) Cost of Goods Manufactured during April

Particulars Amount amount

Direct material consumed 609000

Direct wages 560000

Factory overhead applied 448000

Total Manufacturing cost add during April 1617000

Opening stock Work in progress 361200

Total cost of Work in progress 1978200

Closing stock of work in progress 372600

Cost of Goods Manufactured 1605600

6) Claculation of Gross Profit for April

Cost of Goods Manufactured 1605600

Less: Closing stock of Finished goods 927000

Cost of Goods sold 678600

Add: Under recovery of Factory over head 7000

Net cost of goods sold 685600

Sales 1230000

Gross profit 544400