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Bergo Bay's accounting system generated the following account balances on December 31. The company’s manager knows something is wrong with this list of balances because it does not show any balance for Work in Process Inventory, and the accrued factory payroll (Factory Wages Payable) has not been recorded.
Debit | Credit | |
---|---|---|
Cash | $ 70,000 | |
39,000 | ||
Raw materials inventory | 24,500 | |
Work in process inventory | 0 | |
Finished goods inventory | 15,000 | |
Prepaid rent | 5,000 | |
Accounts payable | $ 11,800 | |
Notes payable | 14,800 | |
Common stock | 50,000 | |
94,000 | ||
Sales | 158,900 | |
Cost of goods sold | 112,000 | |
Factory |
28,000 | |
General and administrative expenses | 36,000 | |
Totals | $ 329,500 | $ 329,500 |
These six documents must be processed to bring the accounting records up to date.
Materials requisition 10: | $ 4,400 | direct materials to Job 402 |
---|---|---|
Materials requisition 11: | $ 7,800 | direct materials to Job 404 |
Materials requisition 12: | $ 2,400 | indirect materials |
Labor time ticket 52: | $ 7,000 | direct labor to Job 402 |
Labor time ticket 53: | $ 13,000 | direct labor to Job 404 |
Labor time ticket 54: | $ 5,000 | indirect labor |
Jobs 402 and 404 are the only jobs in process at year-end. The predetermined overhead rate is 150% of direct labor cost.
2-a. In Factory Overhead T-account, enter amounts from part 1 related to factory overhead. Determine the amount of over- or underapplied overhead.
2-b. Prepare the entry to close any over- or underapplied overhead to Cost of Goods Sold.
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