Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $189,000 ($151,200 direct materials and $37,800 indirect materials). C. Accrued direct labor cost of $50,000 and indirect labor cost of $22,000. d. Depreciation recorded on factory equipment, $105,000 e. Other manufacturing overhead costs accrued during October, $130,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,500 machine-hours were used in October g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 38% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process, Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journal entry

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Answer 1

1 Credit Debit $210,000 a $210,000 $151,200 $37,800 $189,000 с $50,000 $22,000 $72,000 Transaction Account Titles and Explanations Material Inventory Accounts payable (To record purchase of material) b Work in process Inventory Manufacturing overhead account Material Inventory (To record issue of materials) Work in process Inventory Manufacturing overhead account Salaries and wages payable (To record assignment of factory labor) d Manufacturing overhead Accumulated depreciation - Factory Equip (To record depreciation) Manufacturing overhead Accounts payable (To record accrued overheads) f Work in process Manufacturing overhead (To record manufacturing overheads to WIP) Finished Goods Inventory Work in process Inventory (To record completion of FG) h Accounts receivable $105,000 $105,000 e $130,000 $130,000 $535,500 76,500*$7 $535,500 $513,000 $513,000 $623,760 $452,000*138% $623,760 Sales $452,000 (To record sales on account) Cost of goods sold Finished Goods Inventory (To record cost of goods sold) $452,000 2 Manufacturing overhead Material Inventory $37,800 $535,500 Work in process Salaries and wages payable $22,000 (76,500*$7) Accumulated depreciation $105,000 Accounts payable $130,000 End Bal $240,700 Beg. Bal Material Inventory Salaries and wages payable Manufacturing overhead End Bal Work in Process $35,000 $513,000 Finished goods $151,2001 $50,000 $535,500 $258,700