Answer:
1) JOURNAL ENTRIES
a) Debit Material Account $290,000 Credit Accounts Payable $290,000
b) Debit Work in process $ 275,000 Credit Material Account $275000
c) Debit Factory overheads $69300, Debit Selling and admin (utility expense) $7,700 Credit Accounts Payable $77,000
d) Debit Work in process $320,000 Debit Factory overheads $108,000
Credit Salary and wages Payable $428,000
e) Debit Factory overheads $72,000 Credit Accounts payable $72,000
f) Debit Selling and admin expense (Advertising) $154,000 Credit Accounts payable $154,000
g) Debit Debit depreciation expense $90000 Credit Accumulated depreciation on Factory equipment $67,500 Credit Accumulated depreciation on selling and admin facilities $22,500
h)Debit Factory rent $92000 Debit selling and admin rent $23000 Credit Accounts payable $115000
i) Debit Work in process $417,100 Credit Manufacturing overhead costs $417,100
j) Debit Finished goods $950,000 Credit work in process $950,000
k) Debit Accounts receivables $2,100,000 Credit Revenue $2,100,000
Debit cost of sales $980,000 Credit Finished goods $980000
2) DR Raw materials CR
opening bal 48000 work in process 275000
Accounts payable 290000 balance c/d 63000
338000 338000
work in process
opening balance 39000 finished goods 950000
Raw materials 275000 balance c/d 101100
salaries payable 320000
applied overheads 417100
1051100 1051100
finished goods
opening balance 78000 cost of sales 980000
work in process 950000 balance c/d 48000
1028000 1028000
Manufacturing overheads
accounts payable 69300 work in process 417100
salaries payable 108000
accounts payable 72000
depreciation 67500
Accounts payable 92000
cost of sales (over) 8300
417100 417100
selling and admin overheads
Accounts payable 7700 Profit and loss account 207200
Accounts payable 154000
Depreciation 22500
Accounts payable 23000
207200 207200
Accumulated depreciation on Factory equipment
balance c/d 67500 depreciation 67500
Accumulated Depreciation on selling and admin facilities
balance c/d 22500 depreciation 22500
Accounts payable
balance c/d 638700 raw materials 290000
accounts payable 69300
accounts payable 72000
Accounts payable 92000
Accounts payable 7700
Accounts payable 154000
Accounts payable 23000
638700 638700
cost of sale
Finished goods 980000 manufacturing overheads 8300
trading account 971700
980000 980000
sales
trading account 2100000 Accounts receivable 2100000
trading account
cost of sales 971700 sales 2100000
gross profit 1128300
3) cost of goods manufactured
direct material 275000
Direct labor 320000
applied overheads 417100
cost of goods manufactured <u>1012100</u>
4a) Debit Manufacturing overhead 8300 Credit cost of sales 8300
4b) finished goods
opening 78000
work in process 950000
closing goods 48000
Cost of goods sold <u> 980000</u>
5)INCOME STATEMENT
SALES 2100000
COST OF SALES -971700
gross profit 1128300
selling and admin costs -207200
Net income $921100
Explanation: