Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials purchased on account, $209,000. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials). Accrued direct labor cost of $48,000 and indirect labor cost of $22,000. Depreciation recorded on factory equipment, $104,000. Other manufacturing overhead costs accrued during October, $131,000. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,300 machine-hours were used in October. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods. Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 22% above cost.

Answer 1

Answer:

The question is incomplete. Missing Portion is written as bold in explanation.

Explanation:

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000.

Account                                                   Dr                      Cr

1.Raw materials                                     209000

Account payable-Liability                                             209000

The Materials are purchased in credit.

2. Work In Process                               152000

Manufacturing Overhead                     38000

Raw materials                                                               190000

Entry for Materials used in Production.

3.  Work In Process                               48000

Manufacturing Overhead                      22000            

Salaries payable                                                           70000

4.Manufacturing Overhead                   104000            

Depreciation                                                                 104000

5. Manufacturing Overhead                  131000                      

Account payable                                                                 131000

6.Work In Process                                686700     ( 9 x 76300= 686700)

Manufacturing Overhead                                                  686700

7.Finished Goods                                      512000

Work In Process                                                                   512000                      

8.Cost of goods sold                                   449000

Finished Goods                                                                    449000

Accounts Receivable                                  547780

Sales Revenue                                                                     547780

**Sales  - Cost of job * 1.22 (22 % above cost)  

2. T-accounts for Manufacturing Overhead and Work in Process.

                Manufacturing overhead

                  Dr                                   Cr

             22000                             686700  

              38000

              104000

             131000                                                      

Ending balance                             391700 - Favorable          

                           Work In process

                                   Dr                                Cr

beginning bal.        37000                            

                                152000                        

                                48000                            512000

                               686700                                                      

Ending balance       411700