Question

Please help! stuck on A, B, C.

P20.2A (LO 1,2,3,4,5) For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data. Prepare entries in a job order cost system and partial income statement Job Number Explanation Direct Materials Direct Labor Manufacturing Overhead Total Costs 7640 Balance 1/1 $25,000 $24,000 $28,800 $ 77,800 Current year's costs 30,000 36,000 43,200 109,200 7641 Balance 1/1 11,000 18,000 21,600 50,600 Current year's costs 43,000 48,000 57,600 148,600 7642 Current year's costs 58.000 55,000 66,000 179,000 Other data: 1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account 2. Finished goods on January 1 consisted of Job No. 7638 for $97,000 and Job No. 7639 for $92,000. 3. Job No. 7640 and Job No. 7641 were completed during the year. 4. Job Nos. 7638.7639, and 7641 were sold on account for $530,000. 5. Manufacturing overhead incurred on account totaled $120,000 6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000. Instructions a. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. (Hint: Use a single T-account for Work in Process Inventory.) Calculate each of the following, then post each to the T-account: (1) beginning balance, (2) direct materials, (3) direct labor, (4) manufacturing overhead, and (5) completed jobs. $179,000; Job 7642: $179,000 b. Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold. Amount = $6,800 c. Determine the gross profit to be reported for 2020. $158,600

Answer 1

a.	Job 7642 is unfinished
	Cost of job 7642:
					$
	Direct materials				58000
	Direct labor				55000
	Manufacturing overhead				66000
	Total				179000
			Work in process
				Debit				Credit
	1. Beginning balance				5. Completed jobs		(Note:1)	386200
	(77800+50600)			128400
	2. Direct materials				Ending balance			179000
	(30000+43000+58000)			131000
	3. Direct labor
	(36000+48000+55000)			139000
	4. Manufacturing overhead
	(43200+57600+66000)			166800
				565200				565200
	Note:1
	Completed jobs are Job 7640 and 7641
	Jobs				7640	7641	Total
	Beginning balance				77800	50600
	Direct materials				30000	43000
	Direct labor				36000	48000
	Manufacturing overhead				43200	57600
	Total				187000	199200	386200
	Work in process inventory balance=Cost of unfinished work=$ 179000
b.			Manufacturing overhead
				Debit				Credit
	MOH incurred			120000	MOH applied in jobs			166800
	Indirect materials			14000
	Indirect labor			18000
	Depreciation			8000
					(43200+57600+66000)
	Cost of goods sold (Balance)			6800
				166800				166800
	MOH applied > MOH incurred,
	Hence,Overhead is over-applied
	Over-applied overhead=$ 6800
	Adjusting entry:
						Debit	Credit
	Manufacturing overhead					6800
	Cost of goods sold						6800
c.	Gross profit=Sales revenue-Cost of goods sold (adjusted)
	Sales revenue=$ 530000
	Cost of goods sold (adjusted)=Cost of goods sold (Unadjusted)+Under or (over) applied overhead
	Cost of goods sold (Unadjusted)=Cost of jobs sold=Cost of job 7638,7639 and 7641=87000+92000+199200=$ 378200
	Cost of goods sold (adjusted)=378200-6800=$ 371400
	Gross profit=530000-371400=$ 158600