Thank you! Please only respond if you can complete all steps correctly. Please k

Question

Thank you! Please only respond if you can complete all steps correctly. Please keep in mind that T accounts will include: Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Manufacturing Overhead, Cost of Goods Sold, Sales Revenue, and Non-Manufacturing Expenses. Thank you.

2. Shellenback Inc. has provided the following information for April 20x5 a. Beginning balances: raw material $20,000, work-in-process S30,000 and finished goods $15,000. b. Purchased raw materials on account for $200,000 c. Issued $185,000 in raw materials to production (S12,000 were not traceable to specific jobs). d. Incurred $155,000 in direct labor costs (14,750 hours), $52,500 in supervision costs (paid in cash). e. Incurred the following additional manufacturing overhead costs: factory lease S22,000 (paid in cash); depreciation on equipment $26,000; factory utilities S13,500 (paid in cash). Incurred the following nonmanufacturing costs, both paid in cash: advertising S55,000; sales commissions S58,000. Applied manufacturing overhead to jobs in process at a rate of S9 per direct labor hour Completed jobs costing a total of $457,000. Sold jobs for S735,000 on account. The cost of the jobs was $441,000. Closed the manufacturing overhead account balance. f. g. h. i. j. Required: (15 points) Record the transaction journal entries Post the transactions to T-accounts Compute over- or underapplied manufacturing overhead. If the balance in the Manufacturing Overhead account is closed directly to Cost of Goods Sold, will it increase or decrease? Prepare cost of goods manufactured report for April. Prepare April income statement. Include any adjustment to Cost of Goods Sold needed to dispose of over- or underapplied manufacturing overhead.

Explanation / Answer

serial no Account Title and explanation Debit($) Credit($) b Matrial Inventory 200000 Accounts Payable 200000 (raw material purchased on account) c Work in Process 173000 Manufacturing overhead 12000 Material Inventory 185000 (issued material worth $185000 to production out of which $12000 is not traceable and charged to manufacturing overhead) d work in process 155000 Manufacturing Overhead 52500 Cash 52500 Wages payable 155000 (direct labour cost charged to WIP account whereas supervision wages charged to manufacturing overhead) e Manufacturing overhead 61500 Accumulated Depreciation 26000 Cash 35500 (factory lease, factory utilities and depreciation recorded) f Advertising expense 55000 sales Commission 58000 Cash 113000 (advertising expense and sales commission paid in cash) g work in process 132750 Manufacturing Overhead 132750 (applied manufacturing overhead to WIP @ $9 per hour for 14750 direct labur hours) h Finished Goods 457000 Work in Process 457000 (completed job transferred to finished goods account) i Accounts receivable 735000 sales 735000 (sold job) Cost of goods sold 441000 Finished goods 441000 (cost oft he jobs sold recorded) j Manufacturing overhead 6750 Cost of goods sold 6750 Manufacturing overhead Date particulars amount Date particulars amount material inventory 12000 work in process 132750 cash 52500 cash 35500 Accumulated depreciation 26000 Cost of goods sold (Overapplied) 6750 132750 132750 Work in process Date particulars amount Date particulars amount Balance c/f 30000 Finished Goods 457000 material inventory 173000 balance c/d 33750 Wages Payable 155000 Manufacturing Overhead 132750 490750 490750 Material Inventory Date particulars amount Date particulars amount Balance c/f 20000 Work in Process 173000 Accounts payable 200000 Manufacturing overhead 12000 balance c/d 35000 220000 220000 cash Date particulars amount Date particulars amount manufacturing overhead 52500 manufacturing overhead 35500 advertising expense 55000 sales commission 58000 Wages Payable Date particulars amount Date particulars amount balance c/d 155000 Work in process 155000 155000 155000 Accounts payable Date particulars amount Date particulars amount balance c/d 200000 Material Inventory 200000 200000 200000 Accumulated Depreciation Date particulars amount Date particulars amount balance c/d 26000 manufacturing overhead 26000 26000 26000 Advertising Expense Date particulars amount Date particulars amount cash 55000 balance c/d 55000 55000 55000 Sales commission Date particulars amount Date particulars amount cash 58000 balance c/d 58000 58000 58000 Finished Goods Date particulars amount Date particulars amount Balance c/f 15000 Cost of goods sold 441000 work in process 457000 Balance c/d 31000 472000 472000 Accounts receivable Date particulars amount Date particulars amount sales 735000 balance c/d 735000 735000 735000 Cost of Goods sold Date particulars amount Date particulars amount finished goods 441000 Manufacturing overhead 6750 Balance c/d 434250 441000 441000 Sales Date particulars amount Date particulars amount Balance c/d 735000 Accounts receivable 735000 735000 735000 sales $735000 Less: Cost of goods sold (441000 - 6750) 434250 Gross Profit 300750 Less: Operating Expenses Advertisement expense 55000 Sales commission 58000 113000 Net Operating Income $187750

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