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Do you have any problems with the T-accounts and journal entries for the cost allocation under...

Do you have any problems with the T-accounts and journal entries for the cost allocation under Job-order costing method?

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Answer #1

Answer,

No. Journal entries are posted to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.

Example:

Prepare journal entries to record the transactions given above Transaction General Journal raw Material Accounts Payable raw materials purchased Debit Credit 230,000 230,000 Work in process Raw Material 215,000 215,000 raw materials issued to production Work-in Process Manufacturing Overhead Salaries expense Salaries and wages payable Salaries and wages paid in cash 260,000 96,000 140,000 496,000 Manufacturing Overhead Accounts Payable maintenance costs incurred 60,000 60,000 Manufacturing Overhead Salaries expense & Rent expense Accounts payable 147,250 32,750 C& h 180,000 Advertising expense Accounts Payable Advertising expense incurred 142,000 142,000 Manufacturing Overhead Depreciation expense Accumulated Depreciation 67,500 22,500 90,000 Depreciation recorded Work-in Process Manufacturing Overhead (overhead applied) 374,550 374,550 Finished Goods Work in process transferred to the finished goods 830,000 830,000 k1 Accounts Receivable Sales Sales for the vear 1,500,000 1,500,000 k2 Cost of Goods Sold Finished Goods 860,000 860,000 he total cost to duce the goods that were sold1. Post your entries to T-accounts. (Dont forget to enter the beginning inventory balances above.) T-Accounts Raw Materials Invento Beg Bal 36,000 b 215,000 230,000 End Balance 51,000 Work in Process Invento Beg Bal $830,000 27,000 215,000 260,000 374,550 Balance 46,550 Manufacturing Overhead 374,550 96,000 60,000 147,250 67,500 C & h Balance 3,800 Finished Goods Invento Beg Bal 66,000 830,000k2 860,000 Balance 36,000 b) Computation of the cost of goods sold Cost of Goods Sold 860,000 Bal 860,000

3. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Is manufacturing overhead under applied or over applied for the year? Answer: Over applied overhead 3,800 Debit Credit Manufacturing Overhead Cost of Goods Sold 3,800 3,800

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