Question

The following are the job cost related accounts for the law firm of Colaw Associates and their manufacturing equivalents: Law Firm Accounts Manufacturing Firm Accounts Supplies Raw Materials Salaries and Wages Payable Factory Wages Payable Operating Overhead Manufacturing Overhead Service Contracts in Process Work in Process Cost of Completed Service Contracts Cost of Goods Sold Cost data for the month of March follow. 1. Purchased supplies on account $2,000. 2. Issued supplies $1,300 (60% direct and 40% indirect). 3. Assigned labor costs based on time cards for the month which indicated labor costs of $72,300 (80% direct and 20% indirect). 4. Operating overhead costs incurred for cash totaled $47,900. 5. Operating overhead is applied at a rate of 90% of direct labor cost. 6. Work completed totaled $79,400. Collapse question part (a) Journalize the transactions for March.

Answer 1

Answer:

March 1

Supplies  $2,000 (debit)

Trade Payable $2,000 (credit)

March 2

Work - In - Progress $1,300 (debit)

Supplies $1,300 (credit)

March 3

Work - In - Progress $72,300 (debit)

Salaries Payable $72,300 (credit)

March 4

Overheads $47,900 (debit)

Cash $47,900 (credit)

March 5

Work - In - Progress $52,056 (debit)

Overheads $52,056 (credit)

March 6

Finished Goods $79,400 (debit)

Work - In - Progress $79,400 (credit)

Explanation:

March 1

Recognise Asset-Supplies  and Recognise Liability-Trade Payable

March 2

Recognise cost - Work - In - Progress and De-recognise asset - Supplies

March 3

Recognise cost - Work - In - Progress and Recognise a liability - Salaries Payable

March 4

Recognise expense - Overheads and de-recognise asset - Cash

March 5

Recognise cost - Work - In - Progress and de-recognise expense - Overheads

March 6

Recognise asset - Finished Goods and de-recognise cost - Work - In - Progress