Question

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $94,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Work in process Finished goods $10,200 $ 4,300 $ 8,200 During the year, the following transactions were completed: a. Raw materials purchased on account, $169,000. b. Raw materials used in production, $146,000 (materials costing $126,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor Indirect labor Sales commissions Administrative salaries $ 155,000 $ 244,300 $ 27,000 $ 45,000 d. Rent for the year was $18,400 ($13,500 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory. $17,000. f. Advertising costs incurred, $13,000. 9. Depreciation recorded on equipment, $21,000. ($17,000 of this amount related to equipment used in factory operations; the remaining $4,000 related to equipment used in seling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $_? Gode that had #ງ :

Gold Nest Company of Guandong, China is a family-owned enterprise that makes birdcages for the South China market. The comapny sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

Answer 1

XI 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in 025 : fi B с F G H 1 J K L M N O P Q 1 2 Answer 2 3 D E Answer 1 Gold Nest Company Journal entries General Journal Debit Raw material inventory 169,900 Account payable (To record Purchase of raw material inventory 4 Date Credit Raw material Inventory Transactior Debit Credit Transaction Beg. Bal 10,200 146,000 B А 169,900 5 A Transactior Beg. Bal B 6 169,900 Manufacture Overhead Debit Credit Transaction 325,500 H 20,000 244,300 13,500 17,000 17,000 7 С 8 End. Bal $ 34,100 D 9 9 E 10 G Work in progress inventory 126,000 Manufacture overhead (146000-120 20,000 Raw material inventory (To record Issue of raw material inventory.) 11 146,000 Finished Goods Inventory Transactior Debit Credit Transaction Beg. Bal 8,200 220,000 I 225,000 12 End. Bal 13,700 13,700 Over applied 13 14 C 155,000 15 End. Bal $ 13,200 244,300 27,000 16 Work in progress inventory Manufacture overhead Sales commissions Expenses Salaries Expenses - Administrative Cash (To record labor Cost.) 17 45,000 Cost of Goods sold Debit Credit Transaction Work in Progress Inventory Transactic Debit Credit Transaction Beg. Bal 4,300 225,000 1 B 126,000 C 155,000 H 325,500 18 471,300 19 Transactior Beg. Bal J 20 220,000 21 D 13,500 4,900 22 End. Bal $ 220,000 End. Bal $ 385,800 Manufacture overhead Rent Expense (18400-13500) Cash (To record rent.) 18,400 23 24 25 Answer 3 Manufacture Overhead account has credit balance. It means overapplied overhead. 13,700 26 E 17,000 Manufacture overhead Cash 27 17,000 Activate Windows Go to Settings to activate Windows. Sheet1 Sheet2 Sheet3 Sheet4 READY 3 1 + 100% 03:34 i Search the web and Windows O 5 ENG US 14-09-20

X] 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in 050 X х fi B с D Ε E F G H K M N Р Q 24 (To record rent.) 25 Answer 3 Manufacture Overhead account has credit balance. It means overapplied overhead. 13,700 26 E 17,000 Manufacture overhead Cash (To record utility costs.) 27 28 17,000 Date Adj 29 General Journal Debit Credit Manufacture overhead 13,700 Cost of goods sold 13,700 (To record over applied of manufacture overhead.) 30 F Advertising expense 13,000 Cash 13,000 31 32 (To record Advertising expense.) 33 34 G 35 4,000 Manufacture overhead 17,000 Depreciation Expense Accumulated depreciation -equipment (To record Depreciation on equipment.) 21,000 36 37 $ 511,000 $ 206,300 $ 304,700 38 39 н Answer 4 Gold Nest Company Income statement Sales revenue Less: Cost of Goods Sold (Adjusted) Gross Profit Less: Selling and Administrative Expenses Sales commissions Expenses $ 27,000 Salaries Expenses - Administrative $ 45,000 Rent Expense (18400-13500) $ 4,900 Advertising expense $ 13,000 Depreciation Expense $ 4,000 Total Selling and Administrative Expenses Net income Work in progress inventory 325,500 TRUE Manufacture overhead 325,500 (To record Manufacture overhead Applied to Job.) (155000*210%) 40 41 42 1 43 44 Finished goods inventory 225,000 Work in progress inventory 225,000 (To record completion of Finished goods inventory.) 45 $ 93,900 $ 210,800 46 47 J 48 Cost of goods sold 220,000 Finished goods inventory (To record Finished goods Inventory sold.) 220,000 49 50 51 Cost of goods Sold Under (Over) applied of overhead Adjusted Cost of goods Sold $ 220,000 (13,700) 206,300 511.000 Cash Sheet1 Sheet2 Altivate Widows Go to Settings to activate Windows. Sheet3 Sheet4 READY 3 + 100% 03:34 i Search the web and Windows O E ENG US 14-09-20

X] 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in B30 X х fi B с N O P Q F 30 31 32 33 34 G 35 36 37 38 39 H 40 41 D E F G H K M Advertising expense 13,000 Cost of goods sold 13,700 Cash 13,000 (To record over applied of manufacture overhead.) (To record Advertising expense.) Answer 4 Manufacture overhead 17,000 Gold Nest Company Depreciation Expense 4,000 Income statement Accumulated depreciation - equipment 21,000 Sales revenue $ 511,000 (To record Depreciation on equipment.) Less: Cost of Goods Sold (Adjusted) $ 206,300 Gross Profit $ 304,700 Work in progress inventory 325,500 TRUE Less: Selling and Administrative Expenses Manufacture overhead 325,500 Sales commissions Expenses $ 27,000 (To record Manufacture overhead Applied to Job.) (155000*210%) Salaries Expenses - Administrative $ 45,000 Rent Expense (18400-13500) $ 4,900 Finished goods inventory 225,000 Advertising expense $ 13,000 Work in progress inventory 225,000 Depreciation Expense $ 4,000 (To record completion of Finished goods inventory.) Total Selling and Administrative Expenses $ 93,900 Net income $ 210,800 Cost of goods sold 220,000 Finished goods inventory 220,000 Cost of goods Sold $ 220,000 (To record Finished goods Inventory sold.) Under (Over) applied of overhead (13,700) Adjusted Cost of goods Sold 206,300 Cash 511,000 Sales Revenue 511,000 Budgeted Manufacture overhead $ 94,500 (To record sales revenue.) Divided by: Budgeted labor Cost $ 45,000 Predetermined overhead rate 210% 42 43 1 44 45 46 47 J 48 49 50 J 51 52 53 54 55 56 57 Activate Windows Go to Settings to activate Windows. Sheet1 Sheet2 Sheet3 Sheet4 + READY 3 1 + 100% 03:34 i Search the web and Windows O 5 ENG US 14-09-20