Question

ABC Co. recorded the following transactions for the just completed month. The company had no beginning inventories. a) $157,000 in raw materials were purchased on account. b) $135,000 in raw materials were requisitioned for use in production. Of this amount, $122,000 was for direct materials and the remainder was for indirect materials. c) Total labor wages of $165,000 were incurred and paid. Of this amount, $145,000 was for direct labor and the remainder was for indirect labor. d) Additional manufacturing overhead costs of $155,500 were incurred and paid. e) Manufacturing overhead costs of $190,000 were applied to jobs using the company’s predetermined overhead rate. f) Of the jobs in progress at the end of the month, $425,500 were completed and shipped to customers. g) Any underapplied or overapplied overhead for the period was closed out to Cost of Goods Sold.

Required:

1. Post the above transactions to T-accounts (only to the T-accounts shown below). Label each entry.

2. Determine the cost of goods sold for the period.

Answer 1

Anwer T-accouns Rauw malerials he transachons a,b,c,d,e T-accounta obtaineol ysing and ParticulanDebit Gredit Event Padicalan Event Accunh 4157000 AS01 in pioe/2a000 a ryale anufacdmig ! 3000 ovenhead Endna balare 2J00 O Total 415000 Total Ththe above, Endiing alance a000 +13000 1510oo CoE+ooei) ok-in poroceys Debit Pankiealan Event Parntbiculon Coedit Event Raus malenia 12 3000 finishad good 5500 Fading balance 31500 Fadory nge5000 Manuhactuning 90,000 e. ovuhead To tal Tefal 457000 45000

T he above yassoo Ending balance aacoo t14O00 4 190000 31500 Marubadioning ovehea umam Particulan PanhiculanGredit Event Debit Event Rauw maderial inve4 Lsork in protes190,000| 13000 C. Fachy nges Carh 155, 500 cotk goods ofd Covenhtad ovenappled 4 1500 Total $ 190,000 Total 190,000 ie akove Factoryages 14S000 16S000 Cos geads sofd (oveihead oveapplied) 90,000 OQS'ssi -3000 20,000

Page No (3 rish cds Panticulan Debif Gredih Panhicular Event Event Coof gods sol 4asso0 oh in poce4ass00 Total Total asso0 oossch cOn8adold Panhiculows Gedlit Debit Evert Pticulon Evnt tiniched goodsya5500 Manuboconing esha balante 4000 Fnding $4a5s00 Total otal fom Taccoonk Coft ofgoodo Aofd P anubaing oveshtad Cograde 1600 balance 4a5500 1506 Aofd 44000