Question

Journalize the entries to record the following summarized operations related to production for a company using a job order cost system: a. Materials purchased on account $176,000 b. Prepaid expenses incurred on account 12,200 c. Materials requisitioned: For production orders 153,700 For general factory use 2,700 d. Factory labor used: On production orders 141,300 For general factory purposes 12,000 e. Depreciation on factory equipment 37,000 f. Expiration of prepaid expenses, chargeable to factory 6,100 g. Factory overhead costs incurred on account 76,000 h. Factory overhead applied, based on machine hours 105,300 i. Jobs finished 415,300 j. Jobs shipped to customers: Cost 412,000 Selling price (assume all sold on account) 638,000

Answer 1

Answer:

Raw Materials  176,000 debit

 Account Payable   176,000 credit

Factory Overehad 2,700 debit

WIP                     153,700 debit

      Raw Materials           156,400 credit

Factory Overehad 12,000 debit

WIP                        141,300 debit

      Wages Payable           153,300 credit

Factory Overhead 37,000 debit

 acc dep- equipment        37,000 credit

Factory Overhead 6,100 debit

        prepaid                 6,100 credit

Factory Overhead   76,000 debit

        account payable           76,000 credit

WIP                          105,300 debit

      Factory Overhead           105,300 credit

Finished Goods 415,300 debit

          WIP                        415,300 credit

Account receivables   638,000 debit

            Sales Revenue           638,000 credit

COGS                           412,000 debit

            Finished Goods          412,000 credit

Explanation:

Much of these are self-explanatory

Notes:

The direct materials and labor applied to produciton orders go into WIP

he applied overhead goes into WIP too.

Then, for other manufacturing cost we post into the debit side of manufacturing overhead. This way; we can later define the subapplication or overapplication of manufacturing overhead.

The finished goods are debited and WIP credited to represent the transfer to finished goods.

The finished good which are sold will be recognize as COGS