Question

Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3 (The following information applies to the questions displayed below) Widmer Watercraft's predetermined overhead rate for the year 2017 is 200% of direct labor Information on the company's production activities during May 2017 follows. a. Purchased raw materials on credit, $240,000 b. Materials requisitions record use of the following materials for the month. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used $ 49,000 33,000 19,800 22,600 6,600 131,000 20,000 $151,000 c. Paid $15,750 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total $ 12,200 10,600 37,900 39,000 3,600 1 03,300 26.509 $129,800

Answer 1

1.

Prepare Job cost sheet as follows:

	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials (A)	$49,000	$33,000	$19,800	$22,600	$6,600
Labor (B)	$12,200	$10,600	$37,900	$39,000	$3,600
Overhead (200% of Labor) [C = B × 200%]	$24,400	$21,200	$75,800	$78,000	$7,200
Total Cost (A + B + C)	$85,600	$64,800	$133,500	$139,600	$17,400

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2.

Prepare journal entries as follows:

Trn.	General Journal	Debit	Credit
a	Raw materials inventory	$240,000
	Accounts payable		$240,000
b	Factory payroll	$129,800
	Cash		$129,800
c	Factory overhead	$15,750
	Cash		$15,750
d	Work in process inventory	$131,000
	Factory overhead	$20,000
	Raw materials inventory		$151,000
e	Work in process inventory	$103,300
	Factory overhead	$26,500
	Factory payroll		$129,800
f	Work in process inventory	$178,200
	Factory overhead		$178,200
	($12,200+$37,900+$39,00) × 200%
	Finished goods inventory	$358,700
	Work in process inventory		$358,700
g	Accounts receivable	$530,000
	Sales		$530,000
	Cost of goods sold ($85,000+$133,700)	$218,700
	Finished Work inventory		$218,700
h	Factory overhead	$154,000
	Accumulated depreciation-Factory building		$70,000
	Accumulated depreciation-Factory equipment		$38,000
	Prepaid insurance		$10,000
	Property taxes payable		$36,000
i	Work in process inventory	$28,400
	Factory overhead ($10600+$3600) × 200%		$28,400

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3.

Prepare T-accounts as follows:

Raw material inventory
a	$240,000	d	$151,000
End. Bal.	$89,000
Work in process inventory
d	$131,000	f	$358,700
e	$103,300
f	$178,200
i	$28,400
End. Bal.	$82,200
factory payroll
b	$129,800	e	$129,800
End. Bal.	$0
Factory overhead
c	$15,750	f	$178,200
d	$20,000	i	$28,400
e	$26,500
h	$154,000
End. Bal.	$9,650
Finished Goods inventory
f	$358,700	g	$218,700
End. Bal.	$140,000
COGS
g	$218,700
End bal.	$218,700