Question

Instructions Chart of Accounts Journal Instructions Munson Co. uses a job order cost system. The following data summarize the operations related to production for July July 1 Materials purchased on account, $225,750 Materials requisitioned, $217,600, of which $17,600 was for general factory use 2 31 Factory labor used, $680,000, of which $72,300 was indirect Other costs incured on account for factory overhead, $330,000; selling expenses, $180,000, and 31 administrative expenses, $126,000 31 Prepaid expenses expired for factory overhead, $27,500, for selling expenses, $8,100; and for administrative expenses, $5,250 31 Depreciation of office building was $44,500; of office equipment, $16,800, and of factory equipment, $55,100 31 Factory overhead costs applied to jobs, $548,000 31 Jobs completed, $1,140,000 Cost of goods sold, $1,128,000 31 Jounalize the entries to record the summarized operations. Refer to the Chart of Accounts for exact wording of account titles

Answer 1

Solution

Munson Company

Journal Entries

Date	Account Titles	Debit	Credit
Jul-01	Raw materials inventory	$225,750
	Accounts Payable		$225,750
	(materials purchased on account)
Jul-02	Work in Process	$200,000
	Factory overhead	$17,600
	Raw materials inventory		$217,600
	(To record material requisitioned to wip, FOH)
Jul-31	Work in Process	$607,700
	Factory overhead	$72,300
	Wages Payable		$680,000
	(To record direct and indirect labor)
Jul-31	Factory overhead	$330,000
	Selling expenses	$180,000
	Administrative expenses	$126,000
	Accounts Payable		$636,000
	(To record other costs incurred)
Jul-31	Factory overhead	$27,500
	Selling expenses	$8,100
	Administrative expenses	$5,250
	Prepaid Expenses		$40,850
	(To record expired portion of prepaid expenses)
Jul-31	Factory overhead	$55,100
	Depreciation Expense	$61,300
	Accumulated Depreciation - Office Building		$44,500
	Accumulated Depreciation - Office Equipment		$16,800
	Accumulated Depreciation - Factory Equipment		$55,100
	(To record depreciation expense)
Jul-31	Work in Process	$548,000
	Factory overhead		$548,000
	(Factory overhead applied to jobs)
Jul-31	Finished Goods	$1,140,000
	Work in Process		$1,140,000
	(jobs completed)
July	Cost of Goods Sold	$1,128,000
	Finished Goods		$1,128,000
	(To record cost of goods sold)
Jul-31	Factory overhead	$45,500
	Cost of Goods Sold		$45,500
	(to adjust over applied overhead; 548,000 - 502,500 = 45,500)

Over or under applied overhead:

Factory overhead incurred –

Materials $17,600

Labor $72,300

Other expenses 330,000

Prepaid FOH 27,500

Depreciation 55,100

Total $502,500

Applied overhead 548,000

Over applied overhead = 548,000 – 502,500 = $45,500

The overapplied overhead is adjusted to cost of goods sold.