Job Cost Journal Entries and T Accounts Summarized data for the first month\'s o

Question

Job Cost Journal Entries and T Accounts Summarized data for the first month's operations of Dobson Welding Foundry during 2016 are presented below. A job order costing system is used 1. Materials purchased on account, $58,000 2. Amounts of materials requisitioned and foundry labor used Job Materials Foundry Labor $2,600 5,000 2,400 4,600 2,800 1,200 $ 4,400 7,000 3,200 12,000 4,800 1,400 6,200 4 Indirect material... Indirect labor . . . . 3,400 3. Foundry overhead is applied at the rate of 200% of direct labor costs 4. Miscellaneous foundry overhead incurred: Prepaid foundry insurance written off Property taxes on foundry building accrued.. . . . . . . . . . . _ . . . . . .. . Foundry utilities payable accrued . . . . . . .. . . . . . . . . . . 1,480 2,360 . . . . . . . . . . . . . . . . . . . . . . . . . . ..5,280 7,440 5. Ending work in process consisted of Jobs 4 and 6 6. Jobs 1 and 3 and one-half of Job 2 were sold on account for $20,000, $17,400, and $14,400 respectively. Required a. Open general ledger T accounts for Materials Inventory, Wages Payable, Foundry Overhead Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. Also set up sub- sidiary T accounts as job order cost sheets for each job Prepare general journal entries to record the summarized transactions for the month, and post ap- propriate entries to any accounts listed in requirement (a). Key each entry parenthetically to the related number in the problem data. Determine the balances of any accounts necessary and prepare schedules of jobs in ending work in process and jobs in ending finished goods to confirm that they agree with the related control accounts b. c.

Explanation / Answer

Answer b. Journal Entry Date Particulars Dr. Amt Cr. Amt 1 Materials Inventory                                     58,000.00 Accounts Payable    58,000.00 (Record the material purchased) 2-1. WIP Inventory    18,600.00 Foundry Overhead                                    3,400.00 Wages Payable    22,000.00 (Record the factory labor used) 2-2. WIP Inventory    32,800.00 Foundry Overhead                                    6,200.00     Materials Inventory                                     39,000.00 (Record the material issued to WIP) 3 WIP Inventory    37,200.00     Foundry Overhead                                  37,200.00 (Records the Factory Overhead charged to WIP) 4 Foundry Overhead                                  26,880.00     Prepaid Insurance - Foundry      1,480.00     Property Tax Payable - Foundry      2,360.00     Utilities Payable - Foundry      5,280.00     Accumulated Dep. - Foundry Equip.      7,440.00     Accounts Payable    10,320.00 (Record the factory overhead incurred) 5 Finished Goods    57,800.00     WIP Inventory    57,800.00 (Record the Job 1, 2, & 5 Completed and transferred to Finished goods) 6-1 Accounts receivables             51,800.00 Sales    51,800.00 (record the Job 1, 3 & 2 (Half) sold) 6-2 Cost of Goods Sold                              33,600.00 Finished Goods    33,600.00 (record the cost of goods sold) 7 Foundry Overhead          720.00    Cost of Goods Sold          720.00 (To record the overhead overapplied) Answer a. Material Inventory Wages Payable Beg. Bal                     -        39,000.00 2-2. Beg. Bal                     -   1      58,000.00      22,000.00 2-1. End Bal.      19,000.00 End Bal.      22,000.00 Foundry Overhead WIP Inventory Beg. Bal                     -        37,200.00 3 Beg. Bal                       -        57,800.00 5 2-1.        3,400.00 2-1.        18,600.00 2-2.        6,200.00 2-2.        32,800.00 4      26,880.00 3        37,200.00 Overapplied            720.00 End Bal.                     -   End Bal.        30,800.00 Finished Goods Inventory Cost of Goods Sold Beg. Bal                     -        33,600.00 6-2 Beg. Bal                       -              720.00 overapplied 5      57,800.00 6-2        33,600.00 End Bal.      24,200.00 End Bal.        32,880.00 Answer 3. Reconciliation of WIP Inventory Subsidiary Job-4 Job-6 Total Direct Material      12,000.00           1,400.00    13,400.00 Direct Labor        4,600.00           1,200.00      5,800.00 Foundry Overhead -200% X Direct Labor        9,200.00           2,400.00    11,600.00 Total costs equal to WIP Balance      25,800.00           5,000.00    30,800.00 Reconciliation of Finished Goods Inventory Subsidiary Job-2 - Half Job-5 Total Direct Material        3,500.00           4,800.00      8,300.00 Direct Labor        2,500.00           2,800.00      5,300.00 Foundry Overhead -200% X Direct Labor        5,000.00           5,600.00    10,600.00 Total costs equal to Finished Goods Balance      11,000.00        13,200.00    24,200.00

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