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Hitman42 [59]
3 years ago
8

Morrow Corporation had only one job in process during May—Job X32Z—and had no finished goods inventory on May 1. Job X32Z was st

arted in April and finished during May. Data concerning that job appear below: Job X32Z Beginning balance $ 5,800 Charged to the job during May Direct materials $ 9,100 Direct labor $ 2,800 Manufacturing overhead applied $ 4,800 Units completed 180 Units in process at the end of May 0 Units sold during May 80 In May, overhead was overapplied by $380. The company adjusts its cost of goods sold every month for the amount of the overhead that was underapplied or overapplied. Required: 1. Using the direct method, what is the cost of goods sold for May?
Business
1 answer:
olga2289 [7]3 years ago
4 0

Answer:

Cost of goods sold is $9,620

Explanation:

<em>First step prepare the Cost of Goods Manufactured Account</em>

Direct materials                               $ 9,100

Direct labor                                     $ 2,800

Manufacturing overhead applied  $ 4,800

Total Manufacturing Costs             $16,700

Add Opening Work In Process      $ 5,800

Less Closing Work In Process        $ 0

Cost of Goods Manufactured        $22,500

<em>Next we need to calculate the cost of goods sold as follows :</em>

Opening Finished Goods Inventory                $0

Add Cost of Goods Manufactured             $22,500

Less Closing Finished Goods Inventory    ($12,500)

Cost of goods sold                                       $10,000

Less Over-applied Overheads                         ($380)

Adjusted Cost of goods sold                        $9,620

Finished Goods Inventory = $22,500 × 100/180

                                           = $12,500

Thus Cost of goods sold is $9,620

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Mott Company purchases a machine from Janelle Company. Installation of the machine requires specialized knowledge that Mott Comp
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Answer:

$45,455  and $4,545

Explanation:

Given that

The machine stand alone price = $50,000

Value of the installation = $5,000

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So, by considering the above information, the contract price allocated  to machine is

Contract Price allocated to Machine = Total Contract price × Standalone price ÷ (Standalone price of machine + installation value)

= $50,000 × $50,000 ÷ $55,000

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And for installation , it is

Contract Price allocated to Installation

= $50,000 × $5,000 ÷ $55,000

= $4,545

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2 years ago
A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledge
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Answer:

E)Debit Supplies Expense $850 and credit Supplies $850.

Explanation:

The inventory/supplies balance at the end of the period in which a count was conducted has to be adjusted to reflect the amount of stock/supplies available at the end of the period.

Given that the count indicates that there are $1,250 of supplies on hand and the book balance is $2,100,

The difference is

= $2,100 - $1,250

= $850

Entries required

Debit Supplies Expense $850

Credit Supplies $850.

4 0
3 years ago
Flint Inc. issued $3,790,000 of 10%, 10-year convertible bonds on June 1, 2020, at 99 plus accrued interest. The bonds were date
gulaghasi [49]

Answer:

A. Dr Interest Payable $63,167

Dr Interest expense $127,617

Cr Discount on Bonds payable $1,284

Cr Cash $189,500

B. Dr Bonds payable $1,421,250

Cr Discount on Bonds payable $13,008

Cr Common Stock $612,000

Cr Paid-in capital in excess of par- Common Stock $796,242

Explanation:

(a) Preparation of the entry to record the interest expense at October 1, 2020. Assume that accrued interest payable was credited when the bonds were issued.

Dr Interest Payable $63,167

[($3,790,000*.10)/2*(2/6)]

Dr Interest expense $127,617

[($3,790,000*.10)/2*(4/6) + $1,284]

Cr Discount on Bonds payable $1,284

($321*4)

Cr Cash $189,500

[ ( $3,790,000*.10)/2]

(To record interest expense at October 1, 2020.)

Calculation for the discount per month

First step is to calculate the remaining months

Months remaining= (10 years *12-2)

Months remaining=118 months

Second step is to calculate the Total discount

Total Discount= $3,790,000-($3,790,000*.99)

Total discount=$3,790,000-$3,752,100

Total discount=$37,900

Now let calculate the discount per month

Discount per month=($37,900/118)

Discount per month=$321

(b) Preparation of the entry to record the conversion on April 1, 2021

Dr Bonds payable $1,421,250

Cr Discount on Bonds payable $13,008

Cr Common Stock $612,000

(34,000*$18)

Cr Paid-in capital in excess of par- Common Stock $796,242

[$1,421,250-($13,008+$612,000)]

(To record conversion of bond into 34,000 shares.)

Calculation for Unamortized bond discount

Discount of the bonds $14,213

($37,900*(3/8))

Less Discount amortized ($1,205)

[($37,900/118)*10 years*(3/8)]

Unamortized bond discount $13,008

($14,213-$1,205)

8 0
3 years ago
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