Thai Bay’s computer system generated the following trial balance on December 3

Question

Thai Bay’s computer system generated the following trial balance on December 31, 2011. The company’s manager knows something is wrong with the trial balance because it does not show any balance for Goods in Process Inventory but does show balances for the Factory Payroll and Factory Overhead accounts.

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 100% of direct labor cost.

Prepare journal entries to assign the above costs

Cash $ 49,000 Accounts receivable 43,000 Raw materials inventory 26,500 Goods in process inventory 0 Finished goods inventory 9,000 Prepaid rent 3,000 Accounts payable $ 11,400 Notes payable 14,400 Common stock 30,000 Retained earnings 78,000 Sales 193,700 Cost of goods sold 119,000 Factory payroll 16,000 Factory overhead 25,000 Operating expenses 37,000 Totals $ 327,500 $ 327,500

Explanation / Answer

1a. [DR] Goods in process inventory- $11,400

[CR] Raw materials materials- 11,400 (4,300 + 7,100)

1b. [DR] Goods in process inventory- $14,000

[CR] Wages payable- 14,000 (8,000 + 6,000)

1c. [DR] Goods in process inventory- $14,000

[CR] Factory overhead- 14,000 (8,000 + 6,000)*

*Overhead applied at a rate of 100% of direct labor cost.

1d. [DR] Factory overhead- $2,300

[CR] Raw materials inventory- 2,300

1e. [DR] Factory overhead- $2,000

[CR] Wages payable- 2,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.