Question

Josie Inc. has provided the following information for the year ended 20x8: a. Purchased raw materials on account for $121,400. b. Issued $114,200 in raw materials to production ($22,000 were not traceable to specific jobs). c. Incurred $100,758 in direct labor costs (14,394 hours) and $61,100 in supervision costs (paid in cash). d. Incurred the following additional manufacturing overhead costs: factory lease $23,500 (paid in cash); depreciation on equipment $18,100; custodial supplies $6,200 (paid in cash). e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $73,300; sales commissions $87,500. f. Applied manufacturing overhead to jobs in process at a rate of $11 per direct labor hour. g. Completed jobs costing a total of $344,600. h. Sold jobs for $425,600 on account. The cost of the jobs was $341,500. i. Closed the Manufacturing Overhead account balance. Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Solution:- S.NO. Particulars Debit($) Credit($) (a) Raw Materials Inventory A/c Dr. $121,400 To Accounts Payable A/c $121,400 (To record the Purchased of raw material on credit) (b) Work-in Process Inventory A/c Dr. $114,200 Manufacturing Overheads A/c Dr. $22,000 To Raw Materials Inventory A/c $136,200 (To record issued of raw material to production) (c) Work-in Process Inventory A/c Dr. $100,758 Manufacturing Overheads A/c Dr. $61,100 To Cash A/c $161,858 (To record labour costs incurred ) (d) Manufacturing Overheads A/c Dr. $47,800 To Accumulated Depreciation A/c $18,100 To Cash A/c ($23,500+ $6,200) $29,700 (To record manufacturing overhead cost incurred) (e) Advertising expense A/c Dr. $73,300 Sales commissions A/c Dr. $87,500 To Cash A/c $160,800 (To record Payment of Advertising and selling expenses) (f) Work-in Process Inventory A/c (14,394 hrs x $11) Dr. $158,334 To Manufacturing Overheads A/c $158,334 (To record applied manufacturing overhead cost) (g) Finished Goods Inventory A/c Dr. $344,600 Work-in Process Inventory A/c $344,600 (To record Completition of goods) (h) Accounts Receivables A/c Dr. $425,600 To Sales revenue A/c $425,600 (To record sales on account) Cost of goods sold A/c Dr. $341,500 To Finished Goods Inventory A/c    $341,500 (to record Cost of goods sold )    (i)   Manufacturing Overheads A/c (WN -1) Dr. $27,434 To Cost of goods sold A/c $27,434 (To close overapplied manufacturing overhead to COGS) Working Notes : WN-1:- Actual Manufacturing overhead cost ($22,000 + $61,100 + $47,800) $130,900 Less :- Applied Manufacturing Overhead cost (see f entry) ($158,334) Underapplied or (Overapplied) Manaufcturing Overhead $(27,434)