Question

Tine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,500 and two jobs in process: Job No. 429 $2,000, and Job No. 430 $1,500. During May, a summary of source documents reveals the following.
Job Number Materials Requisition Slips Labor Time Tickets
429 $2,500 $1,900
430 3,500 3,000
431 4,400 $10,400 7,600 $12,500
General use 800 1,200
$11,200 $13,700

Stine Company applies manufacturing overhead to jobs at an overhead rate of 60% of direct labor cost. Job No. 429 is completed during the month.

Required:
Prepare summary journal entries to record (1) the requisition slips, (2) the time tickets, (3) the assignment of manufacturing overhead to jobs, and (4) the completion of Job No. 429.

Answer 1

Answer:

1. Dr Work in Process Inventory $10,400

Dr Manufacturing Overhead $800

Cr Raw Materials Inventory $11,200

2. Dr Work in Process Inventory $12,500

Dr Manufacturing Overhead $1,200

Cr Factory Labor $13,700

3.Dr Work in Process Inventory $7,500

Cr Manufacturing Overhead $7,500

4. 31-May

Dr Finished Good Inventory $7,540

Cr Work in Process Inventory $7,540

Explanation:

1. Preparation of the summary journal entries to record (1) the requisition slips,

31-May

Dr Work in Process Inventory $10,400

Dr Manufacturing Overhead $800

Cr Raw Materials Inventory $11,200

(To record requisition slips)

2.Preparation of the summary journal entries to record the time tickets

31-May

Dr Work in Process Inventory $12,500

Dr Manufacturing Overhead $1,200

Cr Factory Labor $13,700

(To record t time tickets)

3. Preparation of the summary journal entries to record the assignment of manufacturing overhead to jobs

31-May

Dr Work in Process Inventory $7,500

($12,500*60%)

Cr Manufacturing Overhead $7,500

(To record assignment of manufacturing overhead to jobs)

4. Preparation of the summary journal entries to record the completion of Job No. 429.

31-May

Dr Finished Good Inventory $7,540

Cr Work in Process Inventory $7,540

($2,000+$2,500+$1,900+$1,140)

(To record the completion of Job No. 429)