P3-4A. Job Cost Journal Entries Prior to the beginning of 2016. Lowe Company est

Question

P3-4A. Job Cost Journal Entries Prior to the beginning of 2016. Lowe Company estimated that i cur $176,000 of manufacturing overhead cost during 2016, using 16,000 direct labor hours to produce the desired volume of goods. On January 1, 2016, beginning balances of Materials Inventory. Work in Process Inventory, and Finished Goods Inventory were $28,000, $-0-, and $43,000, respectively. Required Prepare general journal entries to record the following for 2016 a. Purchased materials on account, $39,000 b. Of the total dollar value of materials used, $31,000 represented direct material and $11,000 indi- rect material. c. Determined total factory labor, $135,000 (15,000 hrs. @$9/hr.). Of the factory labor, 80% was direct and 20% indirect. e. Applied manufacturing overhead based on direct labor hours to work in process. f. Determined actual manufacturing overhead other than those items already recorded, $92,000. (Credit Accounts Payable.) Ending inventories of work in process and finished goods were $32,000 and $57,000, respec- tively. Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory). Make separate entries. Transferred the balance in Manufacturing Overhead to Cost of Goods Sold g. h.

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Raw material a/c 39000    Account payable a/c 39000 (To record raw material purchase) Work in process a/c 31000 Manufacturing overhead a/c 11000      Raw material a/c 42000 (To record material transferred) Work in process (135000*80%) 108000 Manufacturing overhead a/c (135000*20%) 27000      Wages payable a/c 135000 (To record wages) Work in process a/c 165000      Manufacturing overhead a/c 165000 (To record overhead applied) Manufacturing overhead 92000      Account payable a/c 92000 (To record actual manufacturing overhead) Finished goods inventory a/c 272000     Work in process a/c 272000 (To record cost of finished goods) Cost of goods sold a/c 258000      Finished goods inventory 258000 (To record cost of goods sold) Manufacturing overhead a/c 35000     Cost of goods sold a/c 35000 (To record over applied overhead)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.