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 $85,500 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 $10,100 $ 4,900 $ 8,400 During the year, the following transactions were completed: a. Raw materials purchased on account, $ 162,000. b. Raw materials used in production, $144,000 (materials costing $124,000 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 $ 169,000 $ 242,600 $ 21,000 $ 42,000

I started the journal entries! Need help! Thank you!!

Answer 1

General Journal Credit Credit Requirement (1) Transaction a) Raw Materials Cash Debit $ 169,000 Requirement (2) Raw Materials Beg. Bal. 10,100 $144,000 b) a) $ 169,000 Requirement (3) Event General Journal 1 Manufacturing Overhead Cost of goods sold Debit $14,700 $ 169,000 $ 14,700 b) End. Bal. $ 35,100 (To Close Balance in MOH to Cost of goods sold) Work in Process Manufacturing Overhead Raw Materials $ $ 124,000 20,000 $ 144,000 c) Work in Process Manufacturing Overhead Sales Commissions Expense Salaries Expense Cash $ $ $ $ 169,000 242,600 21,000 42,000 Work in Process Beg. Bal. $ 4,900 $ 229,000 b) $ 124,000 c) $ 169,000 h) $ 321,100 End. Bal. $ 390,000 $ 474,600 Requirement (4) Gold Nest Company Income Statement Sales $ 513,000 Less Cost of Goods Sold $ 204,300 Gross Profit $ 308,700 Less Selling and Administrative Expenses Sales Commissions $ 21,000 Administrative Salaries $ 42,000 Rent Expense $ 4,700 Advertising Expense $12,000 Depreciation Expense $ 7,000 $ 86,700 Net Operating Income $ 222,000 d) Manufacturing Overhead Rent Expense Cash $ $ 13,800 4,700 $ 18,500 Manufacturing Overhead Cash $ 14,000 Finished Goods Beg. Bal. $ 8,400 $ 219,000 ) D $ 229,000 $ 14,000 f) $ 12,000 End. Bal. $ 18,400 Note: Please comment down for any further clarifications Advertising Expense Cash $ 12,000 9) Manufacturing Overhead Depreciation Expense Accumulated Depreciation $ $ 16,000 7,000 $ 23,000 h) $ 321,100 Work in Process Manufacturing Overhead b) c) d) e) 9) Manufacturing Overhead $ 20,000 $321,100 h) $ 242,600 $ $ 14,000 $ 16,000 $ 14,700 End. Bal. 13,800 $ 321,100 1) Finished Goods Work in Process $ 229,000 $ 229,000 i) Cash Sales $ 513,000 $ 513,000 Cost of Goods Sold $ 219,000 1) $ 219,000 Cost of Goods Sold Finished Goods $ 219,000 End. Bal. $ 219,000