Answer:
1. Prepare journal entries to record the transactions given above
2. Prepare T-accounts for Manufacturing Overhead and Work in Process.
Explanation:
1
Debit Raw Material 210.000
Credit Account Payable 210.000
raw materials purchased on account, $210,000
2
Debit Work in process 178.000
Debit manufacturing overhead 12.000
Credit Raw material 190.000
Raw materials used in production, $190,000 ($178,000 direct materials and $12,000 indirect materials)
3
Debit Work in process 90000
Debit manufacturing overhead 110000
Credit Sales ans wages salaries 200000
Accrued direct labor cost of $90,000 and indirect labor cost of $110,000.
4
Debit manufacturing overhead 40000
Credit Acummulate depreciation 40000
Depreciation recorded on factory equipment, $40,000.
5
Debit manufacturing overhead 70000
Credit Account Payable 70000
Other manufacturing overhead costs accrued during October, $70,000.
6
Debit Work in process 240000
Credit manufacturing overhead 240000
The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 30,000 machine-hours were used in October
7
Debit Finished goods 520000
Credit Work in process 520000
Jobs costing $520,000 according to their job cost sheets were completed during October and transferred to Finished Goods
8
Debit Cost of goods 480000
Credit Finished Goods 480000
Jobs that had cost $480,000 to complete according to their job cost sheets were shipped to customers during the month.
9
Debit Account receivable 600000
Credit Sales 600000
These jobs were sold on account at 25% above cost.
Manufacturing Overhead
Debit Credit
2 12.000 240000 6
3 110000
4 40000
5 70000
232.000 240.000
Ending Balance 8.000
Work in process
Begining Balance 42000
2 178.000 520000 7
3 90000
6 459000
769.000 520.000
Ending Balance 249.000
