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 year 2015 is 200% of direct labor. Information on the company's production activities during May 2015 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 $ 49,000 32,500 19,400 23,200 7,200 Total direct materials Indirect materials 131,300 21,000 Total materials used $152,300 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 $ 12,200 10,700 37,900 39,000 3,800 Total direct labor Indirect labor 103,600 26,000 Total $129,600 e. Applied overhead to Jobs 136, 138, and 139. f. Transferred Jobs 136, 138, and 139 to Finished Goods g. Sold Jobs 136 and 138 on credit at a total price of $540,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building Depreciation of factory equipment Expired factory insurance Accrued property taxes payable $ 69,500 38,000 11,000 36,500 i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

Answer 1

1)

	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	$49000	$32500	$19400	$23200	$7200
Labor	12200	10700	37900	39000	3800
Overhead	(12200*2)= 24400	(10700*2)= 21400	(37900*2)= 75800	(39000*2)= 78000	(3800*2)= 7600
Total cost	$85600	$64600	$133100	$140200	$18600

2)

Transaction	General Journal	Debit	Credit
a	Raw materials inventory	$240000
	Account payable		$240000
	(To record raw materials purchased on account)
b	Work in process inventory	$131300
	Factory overhead	$21000
	Raw materials inventory		$152300
	(To record raw materials used)
c	Factory overhead	$15750
	Cash		$15750
	(To record cash paid)
d	Work in process inventory	$103600
	Factory overhead	$26000
	Cash		$129600
	(To record labor used)
e	Work in process inventory ($24400+75800+78000)	$178200
	Factory overhead		$178200
	(To record factory overhead applied of Jobs 136, 138 and 139)
f	Finished goods inventory ($85600+133100+140200)	$358900
	Work in process inventory		$358900
	(To record transferred of Job 136, 138 and 139 to finished goods)
g(1)	Account receivable	$540000
	Sales		$540000
	(To record sales)
g(2)	Cost of goods sold ($85600+133100)	$218700
	Finished goods inventory		$218700
	(To record cost of goods sold)
h	Factory overhead ($69500+38000+11000+36500)	$155000
	Accumulated depreciation- Factory building		$69500
	Accumulated depreciation- Factory equipment		$38000
	Prepaid insurance		$11000
	Property tax payable		$36500
	(To record actual factory overhead)
i	Work in process inventory ($21400+7600)	$29000
	Factory overhead		$29000
	(To record overhead applied of Job 137 and 140)

3)

Raw materials Inventory					Work in process Inventory
Beg. bal.	$0				Beg. bal.	$0
a	240000				b	131300	358900	f
		152300	b		d	103600
					e	178200
End. bal.	$87700				i	29000
					End. bal.	83200
Factory overhead					Finished goods Inventory
b	21000				Beg. bal.	$0
c	15750	178200	e		f	358900	218700	g
d	26000	29000	i
h	155000				End. bal.	140200
End. bal.	10550
Cost of Goods Sold
g	218700
End. bal.	218700

4)

Report of Job Costs
Work in process Inventory
Job 137	$64600
Job 140	18600
Balance	$83200
Finished goods Inventory
Job 139	$140200
Balance	$140200
Cost of Goods Sold
Job 136	$85600
Job 138	133100
Balance	$218700