The following activities took place in the work in process inventory account dur
ID: 2526324 • Letter: T
Question
The following activities took place in the work in process inventory account during April:
Beginning Balance $15,000
Direct Materials Used $120,000
Total manufacturing labor incurred in April was $162,500, 80% of this amount represented direct labor. The predetermined manufacturing overhead rate is 120% of direct labor cost. Actual manufacturing overhead costs for April amounted to $150,000.
Two jobs were completed with total costs of $120,000 and $85,000, respectively. They were sold on account for $265,000 and $155,000, respectively.
a) Compute the balance in work in process inventory on April 30.
b) Record the journal entry for direct materials used in April.
c) Record the journal entry for total manufacuring labor incurred in April.
d) Record the journal entry to allocate manufacturing labor to the appropriate accounts.
e) Record the journal entry for allocated manufacturing overhead for April.
f) Record the entry to move the completed juobs into finished goods inventory.
g) Record the entry to sell the two completed jobs on account.
Explanation / Answer
Rreq a: Balance in WIP on April 30: beginning Balance 15000 Add: Current manufacturing cost Material 120,000 Labour (162500*80%) 130000 OH (130,000*120%) 156000 Total Cost of goods 421000 Less: Cost f Goods completed 205000 Ending balancec in WIP 216000 Journal entry: S.no. Accounts title and explanation Debit $ Credit $ b. Work in Process Inventory Dr. 120,000 Raw material inventory 120,000 c. Factory Wages Dr. 162500 Cash account 162500 d. Work in process Inventory Dr. 130000 Factory Overheads Account Dr. 32500 Factory Wages 162500 e. Work in Process Inventory Dr. 156000 Factory Overheads 156000 f. Finished Goods inventory Dr. 205000 Work in process Inventory 205000 g. Accounts receivable Dr. 420000 Sales revenue 420000 Cost of goods sold dr. 205000 Finished Goods inventory 205000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.