3rd Edition

ISBN: 9780077826482

Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor

Publisher: McGraw-Hill Education

Concept explainers

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing …

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In compari…

Videos

Textbook Question

Chapter 2, Problem 22E

Preparing Journal Entries

Floyds Auto Repair Shop uses a job order Cost System to track the cost of each repair. Floyd's applies its garage or shop overhead at a rate of $20 per direct labor hour spent on each repair. Floyd's uses the following accounts to track the cost of all repairs:
Chapter 2, Problem 22E, Preparing Journal Entries Floyds Auto Repair Shop uses a job order Cost System to track the cost of , example 1

* Because an auto shop does not manufacture a product, the overhead cost includes all of the indirect costs that are incurred in the garage or Shop that cannot be traced to a specific repair job.
The following transactions occurred during the most recent month:
(a) Purchased raw (parts and supplies) on account $16,000.
(b) Used $14,000 in raw materials (parts and supplies). Of this, $10,000 was for major parts that were traceable to individual repair jobs, and the remainder was for incidental supplies such as lubricants, rags, fuel. and so on.
(c) Recorded a total of $12,000 in direct cost (for 500 hours) that are not yet paid.
(d) Applied overhead to repair jobs at a rate of $20 per direct hour.
(e) Recorded the following actual overhead costs:
(f) Completed repair jobs costing $40,000 and charged customers at cost plus an additional 30 percent. (Note: You can bypass the Finished Goods Inventory which appropriate in this context.)
Prepare journal entries for transactions (a) through (f) using the account names shown and other appropriate accounts such as Cash, payables, Accumulated Depreciation. Prepaid, and Sales Revenue.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 2, Problem 21E

Chapter 2, Problem 23E

Students have asked these similar questions

hi expert please help me financial accounting

need help this questions

Selected comparative financial statements of Korbin Company follow. Sales KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 $ 512,008 $ 392,240 2019 $ 272,200 Cost of goods sold 308,229 245,542 174,208 Gross profit 203,779 146,698 97,992 Selling expenses 72,705 54,129 35,930 Administrative expenses 46,081 34,517 22,593 Total expenses 118,786 88,646 58,523 Income before taxes .84,993 58,052 39,469 Income tax expense 15,809 11,901 8,012 Net income $ 69,184 $ 46,151 $ 31,457 KORBIN COMPANY Comparative Balance Sheets Assets Current assets Long-term investments Plant assets, net Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings December 31 2021 2020 2019 $ 54,370 0 $ 36,390 600 $ 48,645 3,870 99,436 90,776 53,339 Total liabilities and equity $ 153,806 $ 127,766 $ 105,854 $ 22,456 $ 19,037 $ 18,524 68,000 68,000 50,000 8,500 8,500 5,556 54,850 32,229 31,774 $ 153,806 $ 127,766 $ 105,854

Chapter 2 Solutions

Managerial Accounting

Ch. 2 - What is the difference between job order and...Ch. 2 - What types of companies are likely to use job...Ch. 2 - What types companies are likely to use process...Ch. 2 - Many service industries use job order costing to...Ch. 2 - Prob. 5Q Ch. 2 - Prob. 6Q Ch. 2 - Prob. 7Q Ch. 2 - Prob. 8Q Ch. 2 - Prob. 9Q Ch. 2 - Prob. 10Q

Ch. 2 - Prob. 11Q Ch. 2 - Prob. 12Q Ch. 2 - Prob. 13Q Ch. 2 - Prob. 14Q Ch. 2 - Prob. 15Q Ch. 2 - Prob. 16Q Ch. 2 - Prob. 17Q Ch. 2 - Prob. 18Q Ch. 2 - Prob. 19Q Ch. 2 - Prob. 20Q Ch. 2 - Prob. 21Q Ch. 2 - Prob. 1MC Ch. 2 - Prob. 2MC Ch. 2 - Prob. 3MC Ch. 2 - Prob. 4MC Ch. 2 - Prob. 5MC Ch. 2 - Prob. 6MC Ch. 2 - Prob. 7MC Ch. 2 - Applied overhead costs are recorded a. On the left...Ch. 2 - Prob. 9MC Ch. 2 - Prob. 10MC Ch. 2 - Identifying Companies That Use Job Order versus...Ch. 2 - Prob. 2ME Ch. 2 - Prob. 3ME Ch. 2 - Prob. 4ME Ch. 2 - Prob. 5ME Ch. 2 - Prob. 6ME Ch. 2 - Prob. 7ME Ch. 2 - Prob. 8ME Ch. 2 - Prob. 9ME Ch. 2 - Prob. 10ME Ch. 2 - Prob. 11ME Ch. 2 - Calculating Over- or Underapplied Overhead Costs...Ch. 2 - Prob. 13ME Ch. 2 - Prob. 14ME Ch. 2 - Prob. 15ME Ch. 2 - Calculating Direct Materials Used in Production...Ch. 2 - Calculating Missing Amounts and Cost or Goods...Ch. 2 - Prob. 19ME Ch. 2 - Prob. 1E Ch. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 3E Ch. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 5E Ch. 2 - Finding Unknown Values in the Cost of Goods...Ch. 2 - Prob. 7E Ch. 2 - Prob. 8E Ch. 2 - Prob. 9E Ch. 2 - Prob. 10E Ch. 2 - Calculating the Cost of Finished and Unfinished...Ch. 2 - Computing Overhead Rate and Billing Rate for...Ch. 2 - Prob. 13E Ch. 2 - Prob. 14E Ch. 2 - Prob. 15E Ch. 2 - Prob. 16E Ch. 2 - Prob. 17E Ch. 2 - Prob. 18E Ch. 2 - Prob. 19E Ch. 2 - Prob. 20E Ch. 2 - Prob. 21E Ch. 2 - Preparing Journal Entries Floyds Auto Repair Shop...Ch. 2 - Applying Job Order Costing in a Service Setting...Ch. 2 - Prob. 24E Ch. 2 - Prob. 1.1GAP Ch. 2 - Prob. 1.2GAP Ch. 2 - Prob. 1.3GAP Ch. 2 - Prob. 1.4GAP Ch. 2 - Prob. 1.5GAP Ch. 2 - Preparing Journal Entries Refer to the information...Ch. 2 - Prob. 3.1GAP Ch. 2 - Prob. 3.2GAP Ch. 2 - Prob. 3.3GAP Ch. 2 - Prob. 3.4GAP Ch. 2 - Prob. 3.5GAP Ch. 2 - Prob. 4.1GAP Ch. 2 - Prob. 4.2GAP Ch. 2 - Prob. 4.3GAP Ch. 2 - Prob. 5.1GAP Ch. 2 - Prob. 5.2GAP Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Prob. 5.4GAP Ch. 2 - Prob. 6GAP Ch. 2 - Prob. 7.1GAP Ch. 2 - Prob. 7.2GAP Ch. 2 - Prob. 7.3GAP Ch. 2 - Prob. 7.4GAP Ch. 2 - Prob. 7.5GAP Ch. 2 - Prob. 8.1GAP Ch. 2 - Prob. 8.2GAP Ch. 2 - Prob. 8.3GAP Ch. 2 - Prob. 8.4GAP Ch. 2 - Prob. 8.5GAP Ch. 2 - Prob. 1.1GBP Ch. 2 - Prob. 1.2GBP Ch. 2 - Prob. 1.3GBP Ch. 2 - Prob. 1.4GBP Ch. 2 - Prob. 1.5GBP Ch. 2 - Prob. 2GBP Ch. 2 - Prob. 3.1GBP Ch. 2 - Prob. 3.2GBP Ch. 2 - Prob. 3.3GBP Ch. 2 - Prob. 3.4GBP Ch. 2 - Prob. 3.5GBP Ch. 2 - Prob. 4.1GBP Ch. 2 - Prob. 4.2GBP Ch. 2 - Prob. 4.3GBP Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Recording Manufacturing Costs and Analyzing...Ch. 2 - Prob. 5.4GBP Ch. 2 - Prob. 6GBP Ch. 2 - Prob. 7.1GBP Ch. 2 - Prob. 7.2GBP Ch. 2 - Prob. 7.3GBP Ch. 2 - Prob. 7.4GBP Ch. 2 - Prob. 7.5GBP Ch. 2 - Prob. 8.1GBP Ch. 2 - Prob. 8.2GBP Ch. 2 - Prob. 8.3GBP Ch. 2 - Prob. 8.4GBP Ch. 2 - Prob. 8.5GBP

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.

Solution Summary: The author describes journal entry as the logging of a transaction into debit credit balance in an accounting system.

Concept explainers

Videos

Want to see the full answer?

Chapter 2 Solutions