Question

The Polaris Company uses a job-order costing system. The following transactions occurred in October a. Raw materials purchased on account, $209,000 b. Raw materials used in production. $191,000 ($152.800 direct materials and $38.200 indirect materials) c. Accrued direct labor cost of $48.000 and indirect labor cost of $21.000 d. Depreciation recorded on factory equipment, $104,000. e. Other manufacturing overhead costs accrued during October $130.000 The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine hour. A total of 76,000 machine-hours were used in October. 9. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods h. Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 40% above cost. Required: 1. Prepare journal entries to record the transactions given above 2. Prepare T-accounts for Manufacturing Overhead and Work in Process Post the relevant transactions from above to each account Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36.000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000. Manufacturing Overhead Work in Process Beg Bal. End. Bal. End. Bal. < Prev 1 of 5 !!! Next >

Answer 1

1.

The journal entries will be prepared as follows:

Transaction	Account Title	Debit	Credit
a.	Raw materials inventory	209000
	Accounts payable		209000
b.	Work in process inventory	152800
	Manufacturing overhead	38200
	Raw materials inventory		191000
c.	Work in process inventory	48000
	Manufacturing overhead	21000
	Wages payable		69000
d.	Manufacturing overhead	104000
	Accumulated depreciation - Factory equipment		104000
e.	Manufacturing overhead	130000
	Accounts payable		130000
f.	Work in process inventory ($6 x 76,000)	456000
	Manufacturing overhead		456000
g.	Finished goods inventory	514000
	Work in process inventory		514000
h.	Accounts receivable ($448,000 x 140%)	627200
	Sales revenue		627200
	Cost of goods sold	448000
	Finished goods inventory		448000

2.

The T-accounts will be prepared as follows:

Manufacturing Overhead
b.	38200	456000	f.
c.	21000
d.	104000
e.	130000
End. Bal.		162800
Work in Process
Beg. Bal	36000
b.	152800	514000	g.
c.	48000
f.	456000
End. Bal.	178800