Problem

Schmeltz Industries organized in January and recorded the following transactions during it...

Schmeltz Industries organized in January and recorded the following transactions during its first month of operations:

Jan. 5

Purchased materials on account for $800,000.

Jan. 9

Used materials costing $450,000 on job no. 1001

Jan. 14

Used materials costing $200,000 on job no. 1002

Jan. 18

Used materials costing $100,000 on job no. 1003

Jan. 25

Applied the following direct labor costs to jobs: job no. 1001, $3,600: job no. 1002, $5,400; job no. 1003, $1,350. (Direct labor workers earn $18 per hour.)

Jan. 27

Applied manufacturing overhead to all jobs at a rate of $450 per direct labor hour.

Jan. 28

Completed and transferred job no. 1001 and job no. 1002 to the finished goods warehouse.

Jan. 29

Sold job no. 1001 on account for $725,000.

Jan. 31

Recorded and paid actual January manufacturing overhead costs of $250,000, cash.

Jan. 31

Closed the Manufacturing Overhead account directly to Cost of Goods Sold.

a.Prepare journal entries for each of the above transactions.


b.Compute the balance of the Cost of Goods Sold account at January 31.


c.Determine the company’s inventor}’ balances at January 31.


d.Was manufacturing overhead in January overapplied. or was it underapplied? Explain.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search