Answer:
1. Journal Entries
a.
Debit Raw materials $209,000
Credit Accounts Payable $209,000
To record the purchase of raw materials on account.
b.
Debit Work in Process $152,800
Debit Manufacturing Overhead $38,200
Credit Raw materials $191,000
To record raw materials used in production as direct and indirect materials respectively.
c.
Debit Work in Process $48,000
Debit Manufacturing Overhead $20,000
To record direct and indirect labor costs.
d.
Debit Manufacturing Overhead $106,000
Credit Depreciation Expense-Equipment $106,000
To record depreciation on factory equipment.
e.
Debit Manufacturing Overhead $131,000
Credit Expenses Payable $131,000
To accrue other manufacturing overhead costs.
f.
Debit Work in Process $380,500
Credit Manufacturing Overhead $380,500
To apply manufacturing overhead cost to production.
g.
Debit Finished Goods Inventory $515,000
Credit Work in Process $515,000
To transfer goods to finished goods inventory.
h.
Debit Cost of Goods Sold $451,000
Credit Finished Goods Inventory $451,000
To record the cost of goods sold.
Debit Accounts Receivable $622,380
Credit Sales Revenue $622,380
To record the sale of goods on account at 38% above cost.
2. T-accounts for Manufacturing Overhead and Work in Process
Manufacturing Overhead
Account Title Debit Credit
Raw materials $38,200
Indirect labor cost 20,000
Depreciation-Equip. 106,000
Other costs 131,000
Work in Process $380,500
Ending balance 85,300
Work in Process
Account Title Debit Credit
Beginning Balance $35,000
Raw materials 152,800
Direct labor cost 48,000
Manuf. Overhead 380,500
Finished Goods $515,000
Ending Balance 101,300
Explanation:
Manufacturing overhead applied = 76,100 * $5 = $380,500
Manufacturing overhead overapplied = $85,300
