ACCTMIS 2200 Lecture Notes - Lecture 5: Financial Statement, Trial Balance, Current Liability
ACCTMIS 2200 Full Course Notes
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The Polaris Company uses a job-order costing system. Thefollowing transactions occurred in October:
Raw materials purchased on account, $210,000.
Raw materials used in production, $190,000 ($152,000 directmaterials and $38,000 indirect materials).
Accrued direct labor cost of $48,000 and indirect labor cost of$21,000.
Depreciation recorded on factory equipment, $105,000.
Other manufacturing overhead costs accrued during October,$130,000.
The company applies manufacturing overhead cost to productionusing a predetermined rate of $5 per machine-hour. A total of76,100 machine-hours were used in October.
Jobs costing $511,000 according to their job cost sheets werecompleted during October and transferred to Finished Goods.
Jobs that had cost $449,000 to complete according to their jobcost sheets were shipped to customers during the month. These jobswere sold on account at 30% above cost.
Required:
1. Prepare journal entries to record the transactions givenabove.
2. Prepare T-accounts for Manufacturing Overhead and Work inProcess. Post the relevant transactions from above to each account.Compute the ending balance in each account, assuming that Work inProcess has a beginning balance of $34,000.
Raw materials purchased on account, $210,000.
Note: Enter debits before credits.
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Record the raw materials issued to production, $190,000($152,000 direct materials and $38,000 indirect materials).
Note: Enter debits before credits.
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Record the entry for accrued direct labor cost incurred,$48,000; indirect labor cost incurred, $21,000.
Note: Enter debits before credits.
Depreciation recorded on factory equipment, $105,000. Note: Enter debits before credits.
Other manufacturing overhead costs accrued during October,$130,000. Note: Enter debits before credits.
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Record the cost of goods sold.
Note: Enter debits before credits.
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Record the sales on account.
Note: Enter debits before credits.
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Prepare T-accounts for Manufacturing Overhead and Work inProcess. Post the relevant transactions from above to each account.Compute the ending balance in each account, assuming that Work inProcess has a beginning balance of $34,000.
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Required information
[The following information applies to the questionsdisplayed below.]
Widmer Watercraft’s predetermined overhead rate for the year 2017is 200% of direct labor. Information on the company’s productionactivities during May 2017 follows.
Purchased raw materials on credit, $220,000.
Materials requisitions record use of the following materials forthe month.
| Job 136 | $ | 49,000 | |
| Job 137 | 33,500 | ||
| Job 138 | 20,200 | ||
| Job 139 | 22,800 | ||
| Job 140 | 7,000 | ||
| Total direct materials | 132,500 | ||
| Indirect materials | 21,000 | ||
| Total materials used | $ | 153,500 | |
Paid $15,750 cash to a computer consultant to reprogram factoryequipment.
Time tickets record use of the following labor for the month.These wages were paid in cash.
| Job 136 | $ | 12,100 | |
| Job 137 | 10,700 | ||
| Job 138 | 37,900 | ||
| Job 139 | 39,600 | ||
| Job 140 | 3,200 | ||
| Total direct labor | 103,500 | ||
| Indirect labor | 25,500 | ||
| Total | $ | 129,000 | |
Applied overhead to Jobs 136, 138, and 139.
Transferred Jobs 136, 138, and 139 to Finished Goods.
Sold Jobs 136 and 138 on credit at a total price of$545,000.
The company incurred the following overhead costs during themonth (credit Prepaid Insurance for expired factory insurance).
| Depreciation of factorybuilding | $ | 70,000 | |
| Depreciation of factoryequipment | 38,000 | ||
| Expired factory insurance | 11,000 | ||
| Accrued property taxespayable | 35,500 | ||
Applied overhead at month-end to the Work in Process Inventoryaccount (Jobs 137 and 140) using the predetermined overhead rate of200% of direct labor cost.
2. Prepare journal entries to record the eventsand transactions a through i.
Record raw material purchases on credit.
Note: Enter debits before credits.
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Record the requisition of direct and indirect materials.
Note: Enter debits before credits.
Record payment to computer consultant to reprogram factoryequipment. Note: Enter debits before credits.
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