Question
journal entries for the following using the Chart of Accounts included.
Wonderama Playgrounds, Inc. manufactures playground equipment for parks and schools. Their business year is the calendar year and they use a job-order cost system for inventory and sales Wonderama Playgrounds, Inc. manufactures all products in a single production department. An individual job-order cost sheet is maintained fr each job. The job-order cost sheet contains accumulated costs for each job, including actual direct materials, actual direct labor, and applied factory overhead. Factory overhead is applied to each job based on 125% of direct labor costs for that job. Wonderama Playgrounds. Inc. marks up all work by 40% of the Job cost (sales price total cost of Job x 140%). Since Wonderama Playgrounds, Inc. sells to builders, contractors, school districts and schools, all sales are exempt from state sales tax. All sales are on account and are subject to terms of 2/10, net30 days, FOB Shipping Point. Accounts Payable is used solely for the purchase of direct materials, indirect materials, and factory supplies. All vendors expect full payment within 30 days. Operating expenses, with the exception of any accrued salaries, property taxes, and income taxes, are paid when incurred; all employees are paid at the end of the month. All cash is deposited in the bank when received and all payments are made by check. Following are the transactions for Wonderama Playgrounds, Inc. for January 2020: Paid Larchmont Advertising Agency $1,363 for designing advertisements to appear in local newspapers in January Jan. 2 Paid Princely Properties $4.250 for the January rent. Of this amount, 30% is for the office facilities and 70% is for the factory facilities. Received $30,200.00 on account from customers (no discount allowed). Sold Job #349, which was finished in December 2019 at a total cost of$39.800, to Happy Jan. 4 Jan. 5 Jacks Preschool. Jan. 7 Received a check from Lawson Corporation for the amount due. Payment was received within the discount period. (Balance due: $9,420.00) Jan. 9 Paid Nogood Wood Products $8,562.40 in payment of their January 1 balance an. Collected the amount due from Happy Jacks Preschool for the sale on Jan. 5 Jan. 13 Pid Sorenson Plastics Company $12,925.00 in payment on account. Applied $3.860.00 of direct materials to Job #351 Applied $10,380.00 of direct labor to Job #351 Applied factory overhead to Job #351 Transferred the completed job #351 to Finished Goods. an. an. an. an.
Explanation / Answer
Journal Entries on the basis of Chart of Accounts given in question:
Jan 2 : Advertisement Expense account (Debit) $ 1363
To Cash Account (Credit) $1363
( Advertisement expesnes paid to Local newspaper Agency for designing advertisement)
Jan 2 : Rent Expense account (Debit) $4250
To Cash Account(Credit) $4250
(Rent paid for the month of january for office & Factory)
Jan 4 : Cash Account (Debit) $ 30200
To Accounts Receivable account (Credit) $ 30200
(cash collected from customers,no discount allowed)
Jan 5: Accounts Receivable account(Debit) $ 39800
To Sales account (Credit) $ 39800
(sold job# 349 to happy jecks preschool)
Jan 7: Bank account(debit) $9420
To Accounts Receivable account (Credit) $9420
(Chequw recieced from lawson corporation with in discount period)
Jan 9 : Inventory (Raw Material) account (debit) $8562.40
To Bank Account (Credit) $8562.40
Jan 12 : Cash Account (Debit) $ 30200
To Accounts Receivable account (Credit) $ 30200
( Collected the amount due from happy jecks preschool for the sale on Jan 5)
Jan 13: Account Payable (Debit) $ 12925
To Bank Account (Credit) $ 12925
(Payment made to Soreson plastic company on account)
Jan 15: Inventory (Raw Material) account (debit) $ 3860
To Account Payable (Credit) $ 3860
(applied direct materal to Job # 351)
Jan 15: Inventory (Work in progress ) account (debit) $ 10380
To Salaries Payable (Credit) $ 10380
(applied direct materal to Job # 351)
Jan 16: Cash Account (Debit) $ 35250
To Accounts Receivable account (Credit) $ 35250
(cash collected from customers,no discount allowed)
Jan 21 : Bank account(debit) $9890
To Accounts Receivable account (Credit) $9890
(Cheque recieced from Sandial corporation , no discount allowed)
