1 Job Cost Journal Entries Prior to the beginning of 2019, Lowe Company estimated that it would incur 2 $176,000 of manufacturing overhead cost during 2019, using 16,000 direct labor hours to produce 3 the desired volume of goods. On January 1, 2019, beginning balances of Materials Inventory, Work-in- 4 Process Inventory, and Finished Goods Inventory were $28,000, S-0-, and $43,000, respectively. 5 Required Prepare general journal entries to record the following for 2019: 6 7 a. Purchased materials on account, $39,000. b. Of the total dollar value of materials used, $31,000 represented direct materials and $11,000 10 indirect materials. 11 c. Determined total factory labor, $135,000 (15,000 hrs. @ $9/hr.) 12 d. Of the factory labor, 80 % was direct and 20 % indirect. 13 e. Applied manufacturing overhead based on direct labor hours to work-in-process. f. Determined actual manufacturing overhead other than those items already recorded, $92,000. 14 15 (Credit Accounts Payable.) g. Ending inventories of work-in-process and finished goods were $32,000 and $57,000, respectively. 16 17 Continued: Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory). Make separate entries. h. Transferred the balance in Manufacturing Overhead to Cost of Goods Sold. 18 19 20 21 To record cost of finished goods. 22 23 General Journal Work in process: 24 Item Debit Credit Description Beginning balance Charges per entries: 25 a Direct Materials 39,000 b. Accounts Payable Purchased materials on account 39,000 26 27 28 Total cost Work in process 29 b 42,000 Less ending balance Cost of finished goods Direct materials 30 31,000 Manufacturing overhead 31 11,000 To record requisition of direct material and indirect material. 32 Cost of goods sold Finished goods 328,000 33 328,000 34 c.& d Work in process 135,000 To record cost of goods sold. Direct Labor 35 108,000 Manufacturing overhead To record distribution of employee wages. 36 135,000 Finished goods: 37 Beginning balance Cost of goods manufactured Finished goods available Less: Ending balance Cost of goods sold 38 Work in process 39 e 165,000 Manufacturing overhead To apply manufacturing overhead 165,000 40 41 42 43 Hours Rate Overhead rate 15,000 $ 44 11.00 45 Rate Hours To transfer over-applied overhead to the Cost of Goods Sold account. Labor hours 16,000 46 47 Applied overhead 165,000 Manufacturing overhead: Charges per entries: 48 b 49 f. d. 50 f. To record other manufacturing overhead incurred. 51 Total actual overhead 52 Applied overhead Finished goods 53 g. 342,000 Over-applied overhead Work in process 342,000 54