Problem

Blue Plate Construction organized in December and recorded the following transactions duri...

Blue Plate Construction organized in December and recorded the following transactions during its first month of operations:

Dec. 2

Purchased materials on account for $400,000.

Dec.3

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

Dec. 9

Used direct materials costing $150,000 on job no. 101.

Dec. 15

Used direct materials costing $30,000 on job no. 102.

Dec. 28

Applied the following direct labor costs to jobs: job no. 100. $9,000: job no. 101. $11.000: job no. 102. $5,000.

Dec. 28

Applied manufacturing overhead to all jobs at a rate of 300%of direct labor dollars,

Dec. 29

Completed and transferred job no. 100 and job no. 101 to the finished goods warehouse.

Dec. 30

Sold job no. 100 on account for $200,000.

Dec. 31

Recorded and paid actual December manufacturing overhead costs of $78,000. cash

Dec. 31

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

a.      Record each of the above transactions as illustrated on pages 775-779.


b.     Compute the amount at which Cost of Goods Sold is reported in the company’s income state­ment for the month ended December 31.


c.      Determine the inventory balances reported in the company’s balance sheet dated Decem­ber 31.


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

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