Ialani Corpuses a job order costing system for the yachts it constructs. On Sept
ID: 2392482 • Letter: I
Question
Ialani Corpuses a job order costing system for the yachts it constructs. On September 1, 2013, the company had the following account balances:
Raw Material Inventory
$ 332,400
Work in Process Inventory
1,512,600
Cost of Goods Sold
4,864,000
On September 1, the three jobs in Work in Process Inventory had the following balances:
Job #75
$586,400
Job #78
266,600
Job #82
659,600
The following transactions occurred during September: Sept. 1 Purchased $1,940,000 of raw material on account.
Sept. 1
Purchased $1,940,000 of raw material on account.
4
Issued $1,900,000 of raw material as follows: Job #75, $289,600; Job #78, $252,600; Job #82, $992,200; Job #86, $312,400; and indirect material, $53,200.
15
Prepared and paid the $757,000 factory payroll for September 1–15. Analysis of this payroll showed the following information:
Job #75
9,660 hours
$ 84,600
Job #78
26,320 hours
267,200
Job #82
20,300 hours
203,000
Job #86
10,280 hours
110,800
Indirect labor wages
91,400
15
On each payroll date, Ialani Corp. applies manufacturing overhead to jobs at a rate of $12.50 per direct labor hour.
15
Job #75 was completed, accepted by the customer, and billed at a selling price of cost plus 30 percent. Selling prices are rounded to the nearest whole dollar.
20
Paid the following monthly factory bills: utilities, $39,600; rent, $70,600; and accounts payable (accrued in August), $196,800.
24
Purchased raw material on account, $624,000.
25
Issued $772,200 of raw material as follows: Job #78, $154,800; Job #82, $212,600; Job #86, $349,000; and indirect material, $55,800.
30
Recorded additional factory overhead costs as follows: depreciation, $809,000; expired prepaid insurance, $165,400; and accrued taxes and licenses, $232,400.
30
Recorded and paid the factory payroll for September 16–30 of $714,400. Analysis of the payroll follows:
Job #78
8,940 hours
$177,400
Job #82
13,650 hours
228,400
Job #86
9,980 hours
243,600
Indirect labor wages
65,000
30
Applied overhead for the second half of the month to jobs.
a. Journalize the September transactions.
b. Use T-accounts to post the information from the journal entries in (a) to the job cost subsidiary accounts and to general ledger accounts.
c. Reconcile the September 30 balances in the subsidiary ledger with the Work in Process Inventory account in the general ledger.
d. Determine the amount of underapplied or overapplied overhead for September.
Raw Material Inventory
$ 332,400
Work in Process Inventory
1,512,600
Cost of Goods Sold
4,864,000
Explanation / Answer
a.
b.
c.
d.
Lalani Corp. General Journal for the month of September 2013 Date Account Title Debit Credit Sept.1 Raw material 1940000 Accounts Payable 1940000 (Purchase of raw material on account) Sept.4 Work-in-process 1846800 Manufacturing Overhead 53200 Raw material 1900000 (Issue of raw material for production) Sept.15 Work-in-process 665600 Manufacturing Overhead 91400 Wages Expense 757000 (Wages paid for Sept.1-15 period) Sept.15 Work-in-process 832000 Manufacturing Overhead 832000 (Application of overhead at $12.50 per hour) Sept.15 Finished Goods 1081350 Work-in-process 1081350 (Completed Job#75 transferred to finished goods) Sept.15 Accounts receivable 1405755 Sales 1405755 (Sale of Job#75 at cost plus 30%) Cost of goods sold 1081350 Finished Goods 1081350 (Cost of Job#75 accounted) Sept.20 Utilities Expense 39600 Rent expense 70600 Accounts Payable 196800 Cash 307000 (Payments made for expenses) Manufacturing Overhead 110200 Utilities Expense 39600 Rent expense 70600 (Factory expenses transferred to manufacturing overhead) Sept.24 Raw material 624000 Accounts Payable 624000 (Purchase of raw material on account) Sept.25 Work-in-process 716400 Manufacturing Overhead 55800 Raw material 772200 (Issue of raw material for production) Sept.30 Depreciation Expense 809000 Insurance Expense 165400 Taxes and licenses Expense 232400 Accumulated Depreciation 809000 Prepaid Insurance 165400 Taxes and licenses Payable 232400 (Recorded expenses) Manufacturing Overhead 1206800 Depreciation Expense 809000 Insurance Expense 165400 Taxes and licenses Expense 232400 Sept.30 Work-in-process 649400 Manufacturing Overhead 65000 Wages Expense 714400 (Wages paid for Sept.1-15 period) Sept.30 Work-in-process 407125 Manufacturing Overhead 407125 (Application of overhead at $12.50 per hour)Related Questions
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