Question

Exercise 1 Benton Printing Corp. began operations on January 1. The following information is available for the operations related to the first quarter's production 1. Raw materials purchased on account were $192,000. 2. Factory wages incurred were $87,300. 3. Materials requisitioned and factory labor used by job: Job Factory Number Materials Labor A20 $35,240 $18,000 A21 42,920 22,000 A22 36,100 15,000 A23 39,270 25,000 Indirect 4,470 7,300 Totals $ 158,000 $87,300 4. Other factory overhead costs included $49,500 incurred on account and $14,550 depreciation on factory equipment. 5. The pre-determined overhead rate is 90% of direct labor cost. 6. Jobs completed during the quarter: A20, A21, and A23. 7. Job A20 was sold for $124,000 cash. Instructions A. Enter the transactional data in the cost flow T-accounts and job cost sheets. B. Prepare the required journal entries for the transactions in the general journal. C. Verify the ending balances of the Work in Process and Finished Goods Inventory by reconciling to the job cost sheets. D. How will the under or over-applied overhead be reported on the financial statements at the end of the quarter?

Answer 1

XIA 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in B16 х Account payable А B с D E F H K M N o 1 2 3 Answer A Raw material Inventory Transaction Debit Credit Transaction Beg. Bal 1 192,000 158,000 За 4 5 6 7 End. Bal $ 34,000 8 9 9 Answer C Individual Job sheet Job Job A20 Job A21 Job A22 Job A23 Total Beginning in progress $ 0 $ 0 $ 0 $ 0 $ 0 Direct material $ 35,240 $ 42,920 $ 36,100 $ 39,270 $ 153,530 Direct labor $ 18,000 $ 22,000 $ 15,000 $ 25,000 $ 80,000 Applied overhead (Direct labor * 90%) $ 16,200 $ 19,800 $ 13,500 $ 22,500 $ 72,000 Total cost added during period $ 69,440 $ 84,720 $ 64,600 $ 86,770 $ 305,530 Status Finished go Finished go in progress Finished goods (unsold) Cost included in Cost of good Finished go Work in pro Finished goods inventory Answer B Journal entries Account title Debit Credit Raw material inventory $ 192,000 Account payable $ 192,000 (To record Purchase of raw material inventory Factory payroll Debit Credit Transaction 10 11 Transaction Beg. Bal 2 12 87,300 87,300 3b 13 14 Event End. Bal $ 15 1 16 Work in Progress Inventory Transaction Debit Credit Transaction 17 18 Beg. Bal 19 2 $ 87,300 6 Factory payroll Cash (To incurred factory labor cost.) За 3b 20 $ 87,300 153,530 240,930 80,000 72,000 21 5 22 23 3a $ 153,530 $ 4,470 End. Bal $ 64,600 Cost of Job 22 = 64600 24 Work in progress inventory (158000-4470) Factory Overhead Raw material inventory (To record Issue of raw material inventory.) 25 $ 158,000 26 27 Finished Goods Inventory Transaction Debit Credit Transactionate Windows Go to Settings to activate Windows . Logo 7ool Sheet18 Sheet19 Sheet20 Sheet21 Sheet22 Sheet23 00.000 Sheet24 Sheet25 Sheet26 + READY CIRCULAR REFERENCES Search the web and Windows O + 100% 08:10 15-09-20 ENG US

XIA 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in B51 : х Finished goods inventory А B c D E G Н. к L M N o F $ 158,000 25 Raw material inventory (To record Issue of raw material inventory.) 26 27 Finished Goods Inventory Transaction Debit Credit Transaction Beg. Bal 6 240,930 69,440 7 28 3b $ 80,000 $ 7,300 29 Work in progress inventory (87300-7300) Factory Overhead Factory payroll (To record labor Cost.) 30 $ 87,300 31 End. Bal $ 171,490 Cost of Job 21 and Job 23 = 84720+86770 = 171490 32 33 4 $ 64,050 34 Factory Overhead Accounts payable Accumulated depreciation - equipment (To record Factory Overhead incurred.) $ 49,500 $ 14,550 Cost of Goods sold Debit Credit Transaction 35 36 Transaction Beg. Bal 7 37 69,440 38 5 $ 72,000 39 Work in progress inventory Factory Overhead (To record Factory Overhead Applied.) $ 72,000 End. Bal $ 69,440 40 41 42 6 43 Finished goods inventory $ 240,930 Work in progress inventory (To record completion of Finished goods inventory.) (69440+84720+86770) $ 240,930 44 Factory Overhead Transaction Debit Credit Transaction Beg. Bal За 4,470 72,000 5 3b 7,300 4 64,050 End. Bal $ 3,820 Under applied overhead = 3820 45 46 7a $ 124,000 47 Cash Sales Revenue (To record sales revenue.) $ 124,000 48 49 7b $ 69,440 50 51 Cost of goods sold Finished goods inventory ITAL Sheet18 Sheet19 $ 69,440 Answer D Unadjusted Cost of Goods sold LLLLLLLL $ 69,440/ate Windows Co to Settings te activate Windows. Sheet20 Sheet21 Sheet22 Sheet23 Sheet24 Sheet25 Sheet26 + READY CIRCULAR REFERENCES Search the web and Windows O + 100% 08:10 15-09-20 ENG US

X] 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in B31 : (To record labor Cost.) A B с D E F G H M N o 31 (To record labor Cost.) K L End. Bal $ 171,490 Cost of Job 21 and Job 23 = 84720+86770 = 171490 32 33 4 $ 64,050 34 Factory Overhead Accounts payable Accumulated depreciation -equipment (To record Factory Overhead incurred.) $ 49,500 $ 14,550 Cost of Goods sold Debit Credit Transaction 35 36 Transaction Beg. Bal 7 37 69,440 38 5 $ 72,000 39 Work in progress inventory Factory Overhead (To record Factory Overhead Applied.) $ 72,000 End. Bal $ 69,440 40 41 42 6 43 Finished goods inventory $ 240,930 Work in progress inventory (To record completion of Finished goods inventory.) (69440+84720+86770) $ 240,930 44 Factory Overhead Transaction Debit Credit Transaction Beg. Bal За 4,470 72,000 5 3b 7,300 4 64,050 End. Bal $ 3,820 Under applied overhead = 3820 45 46 7a Cash $ 124,000 47 $ 124,000 Sales Revenue (To record sales revenue.) 48 49 50 7b $ 69,440 51 Cost of goods sold Finished goods inventory (To record Finished goods Inventory sold.) $ 69,440 Answer D Unadjusted Cost of Goods sold Add: Under applied overhead Adjusted Cost of Goods sold 52 $ 69,440 $ 3,820 $ 73,260 53 54 55 56 57 Cost of Goods sold of 73260 is reported on the income statement. Activate Windows Go to Settings to activate Windows. Sheet18 Sheet19 Sheet20 Sheet21 Sheet22 Sheet23 Sheet24 Sheet25 Sheet26 + READY CIRCULAR REFERENCES Search the web and Windows O + 100% 08:10 15-09-20 ENG US