Hillman tool Company uses a job order cost system. The following ate summarize t

Question

Hillman tool Company uses a job order cost system. The following ate summarize the operations related to production for May 2008, the first month of operations: a. Materials purchased on account, $9,400. b. Materials requisitioned and factory labor used Factory Labor Job No. 101 Job No. 102 Job No. 103 Job No. 104 Job No. 105 Job No. 106 For general factory use Materials $ 875 1,275 660 2,200 1,300 925 270 S 750 985 500 1,765 1,350 790 1,000 c. Factory overhead costs incurred on account, $405 d. Depreciation on machinery and equipment, $520 e. The factory overhead rate is $35 per machine hour. Machine hours used Job No. 101 Job No. 102 Job No. 103 Job No. 104 Job No. 10:5 Job No. 106 Total 10 25 67 f. Jobs completed: Nos. 101, 102, 103, 105 g Jobs were shipped, and customers were billed as follows Job 101, $4,350, Job 102, 54,800, Job 103, $3,500. Instructions: Journalize the entries to record the summarized operations.

Explanation / Answer

Date Account title and explanation Debit Credit a Raw material Inventory 9400 Accounts Payable 9400 (To record purchase of Inventory) b Work in process 7235 Factory overhead 270 Raw material Inventory 7505 (To record raw material usage) c Work in process 7140 Factory overhead 1000 Wages Payable 8140 (To record wages Incurred) d Factory overhead 405 Accounts Payable 405 (To recored factory overhead) e Factory overhead 520 Accumulated Depreciation - Plant equipment 520 f Work in Process 2345 Factory overhead 2345 (To record assignment of overhead) g Finished goods 8920 Work in Process 8920 (To transfer goods to finished stock) h Accounts Receivable 12650 Sales 12650 (To record sales) i Cost of goods sold 5885 Finished goods 5885 (To record cost of sales)

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