FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Topic Video
Question
Edwin Parts, a job shop, recorded the following transactions in May:
- Purchased $87,420 in materials on account.
- Issued $3,760 in supplies from the materials inventory to the production department.
- Issued $43,820 in direct materials to the production department.
- Paid for the materials purchased in transaction (1).
- Incurred wage costs of $67,640, which were debited to Payroll, a temporary account. Of this amount, $22,520 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $45,120 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll.
- Recognized $34,920 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,920 was debited to Payroll and credited to
Fringe Benefits Payable. - Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, indirect manufacturing labor; and 20 percent, administrative and marketing costs.
- Applied
overhead on the basis of 140 percent of direct labor costs. - Paid for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing plant totaling $41,520.
- Recognized
depreciation of $26,520 on manufacturing property, plant, and equipment.
Required:
-
Prepare
journal entries to record these transactions. -
The balances that appeared in the accounts of Edwin Parts are shown as follows.
Beginning Ending Materials Inventory $ 90,120 ? Work-in-Process Inventory 25,620 ? Finished Goods Inventory 102,820 $ 93,420 Cost of Goods Sold — 157,000 Prepare T-accounts to show the flow of costs during the period.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Lamonda Corporation uses a job order cost system. On April 1, the accounts had balances as shown in the T-accounts below: The following transactions occurred during April: a. Purchased materials on account at a cost of $232,170. b. Requisitioned materials at a cost of $112,200, of which $15,400 was for general factory use. c. Recorded unpaid factory labor of $225,200, of which $43,375 was indirect. d. Incurred other costs: Selling expense Factory utilities Administrative expenses Factory rent Factory depreciation e. Applied overhead at a rate equal to 137 percent of direct labor cost f. Completed jobs costing $263,150. g. Sold jobs costing $323,570. h. Recorded sales revenue (on account) of $501,000. Required: 1. & 2. Post the April transactions to the T-accounts and compute the balance in the accounts at the end of April. 3-a. Compute over- or underapplied manufacturing overhead. 3-b. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will…arrow_forwardThe following transactions were incurred by Augustine Fabricators during January, the first month of its fiscal year. Requirements: Record the proper journal entry for each transaction. $205,000 of materials was purchased on account. $158,000 of materials was used in production; of this amount, $155,000 was used on specific jobs. Manufacturing labor and salaries for the month totaled $250,000. $215,000 of the total manufacturing labor and salaries was traced to specific jobs, and the remainder was indirect labor used in the factory. The company recorded $19,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $10,000 which will be paid at a later date. $62,000 of manufacturing overhead was allocated to specific jobs. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?arrow_forward1. Purchased $75,180 in materials on account. Check my work 2. Issued $2,100 in supplies from the materials inventory to the production department. 3. Paid for the materials purchased in transaction (1) 4. Issued $35,700 in direct materials to the production department. 5. Incurred wage costs of $58,800, which were debited to Payroll, a temporary account. Of this amount, $18,900 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $39,900 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. 5. Recognized $29,400 in fringe benefit costs, incurred as a result of the wages paid in (5). This $29,400 was debited to Payroll and credited to Fringe Benefits Payable 7. Analyzed the Payroll account and determined that 60 percent represented direct labor; 30 percent, indirect manufacturing labor, and 10 percent, administrative and marketing costs. 8. Paid for utilities, power, equipment maintenance, and other…arrow_forward
- A review of the accounting records of Benson Manufacturing indicated that the company incurred the following payroll costs during the month of March. Assume the company's financial statements are prepared in accordance with GAAP. 1. Salary of the company president-$31,400. 2. Salary of the vice president of manufacturing—$15,100. 3. Salary of the chief financial officer-$17,900. 4. Salary of the vice president of marketing-$14,800. 5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant—$186,000. 6. Wages of production workers-$933,000. 7. Salaries of administrative personnel-$106,000. 8. Salaries of engineers and other personnel responsible for maintaining production equipment-$171,000. 9. Commissions paid to sales staff-$261,000. Required a. What amount of payroll cost would be classified as SG&A (selling, general, and administrative) expense? b. Assuming that Benson made 3,100 units of product and sold 2,170 of them during the month of March,…arrow_forwardDacosta Corporation had only one job in process on May 1. The job had been charged with $1,950 of direct materials, $6,990 of direct labor, and $9,978 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.70 per direct labor-hour. During May, the following activity was recorded: Raw materials (all direct materials): Beginning balance Purchased during the month Used in production Labor: Direct labor-hours worked during the month Direct labor cost incurred Actual manufacturing overhead costs incurred Inventories: Raw materials, May 30 $ 8,650 $ 38,150 $ 39,450 2,050 $ 24,660 $ 33,450 Work in process, May 30 $ 16,976 Work in process inventory on May 30 contains $3,768 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was: Multiple Choice O $97,140 $104,387 $102,445 $110,630arrow_forwardattend allarrow_forward
- During the current month, Sheridan Company incurs the following manufacturing costs. (a) Purchased raw materials of $17,700 on account. (b) Incurred factory labor of $38,400. (c) Factory utilities of $3,200 are payable, prepaid factory property taxes of $2,660 have expired, and depreciation on the factory building is $9,600. Record the company's manufacturing costs in its job order costing system. Purchased raw materials Incurred factory labor Factory utilities Factory property taxes Factory depreciation Balance $ LA $ Raw Materials Inventory $ $ Manufacturing Costs Factory Labor Manufacturing Overhead $arrow_forwardOn June 30 a company finished job 110 with total costs of $119,000 and transferred the costs to finished goods inventory. On april 10 the company completed the sale of the goods to a customer for 135,000 on account. How would the journal entry be recorded to show the costs of goods sold?arrow_forwardPrepare summary journal entries to record the following transactions for a company in its first month of operations. Raw materials purchased on account, $90,000. Direct materials used in production, $36,500. Indirect materials used in production, $19,200. Paid cash for factory payroll, $50,000. Of this total, $38,000 is for direct labor and $12,000 is for indirect labor. Paid cash for other actual overhead costs, $11,475. Applied overhead at the rate of 125% of direct labor cost. Transferred cost of jobs completed to finished goods, $56,800. Sold jobs on account for $82,000 g(2). The jobs had a cost of $56,800 g(1).arrow_forward
- Edwin Parts, a job shop, recorded the following transactions in May: Purchased $87,200 in materials on account. Issued $3,650 in supplies from the materials inventory to the production department. Issued $43,600 in direct materials to the production department. Paid for the materials purchased in transaction (1). Incurred wage costs of $67,200, which were debited to Payroll, a temporary account. Of this amount, $22,300 was withheld for payroll taxes and credited to Payroll Taxes Payable. The remaining $44,900 was paid in cash to the employees. See transactions (6) and (7) for additional information about Payroll. Recognized $34,700 in fringe benefit costs, incurred as a result of the wages paid in (5). This $34,700 was debited to Payroll and credited to Fringe Benefits Payable. Analyzed the Payroll account and determined that 65 percent represented direct labor; 15 percent, indirect manufacturing labor; and 20 percent, administrative and marketing costs. Applied overhead on the basis…arrow_forwardThe gross earnings of factory workers for Blossom Company during the month of January are $320,000. The employer's payroll taxes for the factory payroll are $64,000. Of the total accumulated cost of factory labor, 75% is related to direct labor and 25% is attributable to indirect labor. (a) Prepare the entry to record the factory labor costs for the month of January. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Your answer has been saved. See score details after the due date. Account Titles and Explanation (b) (c) Factory Labor Payroll Liabilities Your answer has been saved. See score details after the due date. Account Titles and Explanation Work in Process Inventory Manufacturing Overhead Prepare the entry to assign factory labor to production. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit…arrow_forwardA and B pleasearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education