The Winston Company estimates that the factory overhead for the following year w
ID: 2395452 • Letter: T
Question
The Winston Company estimates that the factory overhead for the following year will be $833,900. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 26,900 hours. The total machine hours for the year was 54,000 hours. The actual factory overhead for the year was $1,697,000.
Required:
(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the Chart of Accounts for exact wording of account titles.
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Factory Overhead
(a) Determine the total factory overhead amount applied.
(b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values.
$
(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold on December 31. Refer to the Chart of Accounts for exact wording of account titles.
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Q2:
Present entries to record the above summarized operations related to production for a company using a job order cost system. Refer to the Chart of Accounts for exact wording of account titles.
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General Journal
Present entries to record the following summarized operations related to production for a company using a job order cost system on December 31. Refer to the Chart of Accounts for exact wording of account titles.
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(a) Determine the total factory overhead amount applied. (b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values.(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS Winston Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 131 Materials 133 Work in Process 135 Factory Overhead 137 Finished Goods 141 Supplies 142 Prepaid Expenses 181 Land 190 Factory Equipment 191 Accumulated Depreciation LIABILITIES 210 Accounts Payable 221 Utilities Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Insurance Expense 532 Utilities Expense 533 Office Supplies Expense 560 Depreciation Expense 590 Miscellaneous Expense 710 Interest ExpenseX
Factory Overhead
(a) Determine the total factory overhead amount applied.
Total factory overhead applied(b) Calculate the overapplied or underapplied amount for the year. Enter the amount as positive values.
Factory overhead (overapplied or underapplied?) by$
(c) Prepare the journal entry to close Factory Overhead into Cost of Goods Sold on December 31. Refer to the Chart of Accounts for exact wording of account titles.
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JOURNAL
DATE DESCRIPTION POST. REF. DEBIT CREDIT1
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Q2:
(a) Materials purchased on account $176,000 (b) Prepaid expenses incurred on account 12,200 (c) Materials requisitioned: For production orders 153,700 For general factory use 2,700 (d) Factory labor used: On production orders 141,300 For general factory purposes 12,000 (e) Depreciation on factory equipment 37,000 (f) Expiration of prepaid expenses, chargeable to factory 6,100 (g) Factory overhead costs incurred on account 76,000 (h) Factory overhead applied, based on machine hours 105,300 (i) Jobs finished 415,300 (j) Jobs shipped to customers: Cost 412,000 Selling price (assume all sold on account) 638,000 Required:Present entries to record the above summarized operations related to production for a company using a job order cost system. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 121 Accounts Receivable 131 Materials 133 Work in Process 135 Factory Overhead 137 Finished Goods 141 Supplies 142 Prepaid Expenses 181 Land 190 Factory Equipment 191 Accumulated Depreciation LIABILITIES 210 Accounts Payable 221 Utilities Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Insurance Expense 532 Utilities Expense 533 Office Supplies Expense 560 Depreciation Expense 590 Miscellaneous Expense 710 Interest ExpenseX
General Journal
Present entries to record the following summarized operations related to production for a company using a job order cost system on December 31. Refer to the Chart of Accounts for exact wording of account titles.
(a) Materials purchased on account $176,000 (b) Prepaid expenses incurred on account 12,200 (c) Materials requisitioned: For production orders 153,700 For general factory use 2,700 (d) Factory labor used: On production orders 141,300 For general factory purposes 12,000 (e) Depreciation on factory equipment 37,000 (f) Expiration of prepaid expenses, chargeable to factory 6,100 (g) Factory overhead costs incurred on account 76,000 (h) Factory overhead applied, based on machine hours 105,300 (i) Jobs finished 415,300 (j) Jobs shipped to customers: Cost 412,000 Selling price (assume all sold on account) 638,000PAGE 1
JOURNAL
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Explanation / Answer
Q1. Oh rate per MH: Estimated overheads 833900 Divide: Estimated MH 26900 Oh rate per MH: 31 Actual MH used 54000 OH applied 1674000 (54000 mh @31) Under/Over-applied OH Oh incurred 1697000 Oh applied 1674000 Under-applied OH 23000 Journal entry: Cost of Goods sold Account Dr. 23000 Factory overheads account 23000
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