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, $190,000 ($152,000 direct materials and $38,000 indirect materials) c. Accrued direct labor cost of $49,000 and indirect labor cost of $21,000. d. Depreciation recorded on factory equipment, $105,000. e. Other manufacturing overhead costs accrued during October, $131,000 f The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,000 machine-hours were used in October g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 24% 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 $35,000. Complete this question by entering your answers in the tabs below. Required 1Required 2 Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Comp ending balance in each account, assuming that Work in Process has a beginning balance of $35,000 Manufacturing Overhead Work in Process Beg. Bal End. Bal. End. Bal Required 1 Required 2

Answer 1

Date	General Journal	Debit	Credit
a	Raw Materials inventory	209000
	Accounts payable		209000
b	Work In process inventory	152000
	Manufacturing overhead	38000
	Raw Materials inventory		190000
c	Work in process	49000
	Manufacturing overhead	21000
	Salaries & wages payable		70000
d	Manufacturing overhead	105000
	Accumulated depreciation		105000
e	Manufacturing overhead	131000
	Accounts payable		131000
f	Work In process	608000
	Manufacturing overhead		608000
	(76000)*$8.00
g	Finished goods inventory	514000
	Work In process		514000
h	Accounts receivable	561720
	sales		561720
	(453000*124%)
	Cost of goods sold	453000
	finished goods inventory		453000

Manufacturing overhead
b	38000	f	608000
c	21000
d	105000
e	131000
end bal	313000
Work in process
Beginning balance	35000	g	514000
b	152000
c	49000
f	608000
end bal	330000