Question

PA2-4 (Algo) Preparing Journal Entries (LO 2-S1) Tyler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $215,220 and total machine hours at 63,300. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job: Job 101 Job 102 Job 103 Total Direct materials used $11,200 $ 7,800 $4,200 $ 23,200 Direct labor $ 17,400 $ 5,200 $5,000 $ 27,600 Machine hours 1,900 hours 2,700 hours 800 hours 5,400 hours Job 101 was completed and sold for $50,200. Job 102 was completed but not sold. Job 103 is still in process. Actual overhead costs recorded during the first month of operations totaled $13,760. Required: 1. Prepare a journal entry showing the transfer of Job 102 into Finished Goods Inventory upon its completion. 2. Prepare the journal entries to recognize the sales revenue and cost of goods sold for Job 101. 3. Prepare the journal entry to transfer the balance of the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round your intermediate calculations.) View transaction list

Answer 1

Journal entries

No	General Journal	Debit	Credit
1	Finished goods (7800+5200+2700*3.4)	22180
	Work in process		22180
2	Cost of goods sold (11200+17400+1900*3.4)	35060
	Finished goods		35060
3	Account receivable	50200
	Sales revenue		50200
4	Manufacturing overhead (18360-13760)	4600
	Cost of goods sold		4600

Applied overhead = 5400*3.4 = 18360

Actual overhead = 13760