Question

Journalize the following transactions for Marge's SofasMarge's Sofas.

SOLVE ONLY FOR i. Adjusted for overallocated or underallocated overhead.

Given information

a.Incurred and paid Web site​ expenses $2,000.

b.Incurred manufacturing wages of $15,000​, 75​% of which was direct labor and 25​% of which was indirect labor.

c.Purchased raw materials on​ account $24,000.

d.Used in​ production: direct​ materials,$7,500​ ;indirect​ materials,$5,000.

e.Recorded manufacturing​ overhead: depreciation on​ plant,$18,000​;plant insurance​ (previously paid),$1,500​;plant property​ tax, $3,900​(credit Property Tax​ Payable).

f.Allocated manufacturing overhead to​ jobs, 200​%

of direct labor costs.

g.Completed production on jobs with costs of $40,000.

h.Sold inventory on​ account 22,000​;cost of goods​ sold $ 18,000

i.Adjusted for overallocated or underallocated overhead.

​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

a. Incurred and paid Web site​ expenses,$2,000.

  

Date			Accounts	Debit	Credit
a.			Website Expenses	2,000
			Cash		2,000

b. Incurred manufacturing wages of $15,000​, 75​% of which was direct labor and 25​% of which was indirect labor.

Date			Accounts	Debit	Credit
b.			Work-in-Process Inventory	11,250
			Manufacturing Overhead	3,750
			Wages Payable		15,000

c. Purchased raw materials on​ account, $24,000.

Date			Accounts	Debit	Credit
c.			Raw Materials Inventory	24,000
			Accounts Payable		24,000

d. Used in​ production: direct​ materials, $7,500​; indirect​ materials, $5,000.

Date			Accounts	Debit	Credit
d.			Work-in-Process Inventory	7,500
			Manufacturing Overhead	5,000
			Raw Materials Inventory		12,500

e. Recorded manufacturing​ overhead: depreciation on​ plant, $18,000​; plant insurance​ (previously paid), $1,500​; plant property​ tax, $3,900 (credit Property Tax​ Payable). ​(Prepare a compound​ entry.)

Date			Accounts	Debit	Credit
e.			Manufacturing Overhead	23,400
			Accumulated Depreciation–Plant		18,000
			Prepaid Insurance		1,500
			Property Tax Payable		3,900

f. Allocated manufacturing overhead to​ jobs, 200​% of direct labor costs.

Date			Accounts	Debit	Credit
f.			Work-in-Process Inventory	22,500
			Manufacturing Overhead		22,500

g. Completed production on jobs with costs of $40,000.

Date			Accounts	Debit	Credit
g.			Finished Goods Inventory	40,000
			Work-in-Process Inventory		40,000

h. Sold inventory on​ account, $22,000​; cost of goods​ sold, $18,000.

Begin by recording the revenue from the sales on account. Do not record the expense related to the sale in this journal entry. We will do that in the next step.

Date			Accounts	Debit	Credit
h.			Accounts Receivable	22,000
			Sales Revenue		22,000

Now record the expense related to the sale.

Date			Accounts	Debit	Credit
h.			Cost of Goods Sold	18,000
			Finished Goods Inventory		18,000

i. Adjusted for overallocated or underallocated overhead.

Date			Accounts	Debit	Credit
i.			Cost of Goods Sold
			Manufacturing Overhead

Answer 1

1. Actual Manufacturing OH = 3750 + 5000 + 23400 = $32150

2. Applied Manufacturing OH = 22500

Under Allocated OH = Actual Manufacturing OH - Applied OH

Under Allocated OH = 32150 - 22500 = $9650

Accounts			Accounts	Debit	Credit
Cost of Goods Sold			$9650
Manufacturing Overhead				$9650