Question

Prepare journal entries for the month of April to record the above transactions

Required information [The following information applies to the questions displayed below. Marcelino Co.'s March 31 inventory of raw materials is $88,000. Raw materials purchases in April are $600,000, and factory payroll cost in April is $385,000. Overhead costs incurred in April are: indirect materials, $55,000; indirect labor, $22,000; factory rent, $33,000; factory utilities, $23,000; and factory equipment depreciation, $57,000. The predetermined overhead rate is 50% of direct labor cost. Job 306 is sold for $680,000 cash in April. Costs of the three jobs worked on in April follow. Job 306 J ob 307 Job 308 $ 26,000 21,000 10,500 $ 42,000 18,000 9,000 Balances on March 31 Direct materials Direct labor Applied overhead Costs during April Direct materials Direct labor Applied overhead Status on April 30 136,000 104,000 200,000 155,000 $105,000 104,000 Finished (sold) Pinished (unsold) process a. Materials purchases (on credit). b. Direct materials used in production c. Direct labor paid and assigned to Work in Process Inventory d. Indirect labor paid and assigned to Factory Overhead. e. Overhead costs applied to Work in Process Inventory. f. Actual overhead costs incurred, including indirect materials. (Factory rent and utilities are paid in cash.) 9. Transfer of Jobs 306 and 307 to Finished Goods Inventory h. Cost of goods sold for Job 306. I. Revenue from the sale of Job 306. J. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.) 2. Prepare journal entries for the month of April to record the above transactions.

Answer 1

Solution:

Computation of production cost incurred in april and total cost assigned to each job
Particulars	Job 306	Job 307	Job 308	Total
From March:
Direct material	$26,000.00	$42,000.00	$0.00	$68,000.00
Direct labor	$21,000.00	$18,000.00	$0.00	$39,000.00
Applied overhead (50% of direct labor)	$10,500.00	$9,000.00	$0.00	$19,500.00
Beginning Goods in Process	$57,500.00	$69,000.00	$0.00	$1,26,500.00
For April:
Direct material	$1,36,000.00	$2,00,000.00	$1,05,000.00	$4,41,000.00
Direct labor	$1,04,000.00	$1,55,000.00	$1,04,000.00	$3,63,000.00
Applied overhead (50% of direct labor)	$52,000.00	$77,500.00	$52,000.00	$1,81,500.00
Total Cost added in April	$2,92,000.00	$4,32,500.00	$2,61,000.00	$9,85,500.00
Total Costs (April 30)	$3,49,500.00	$5,01,500.00	$2,61,000.00	$11,12,000.00
Status on April 30	Finished (Sold)	Finished (Unsold)	In Process
April 30 cost included in	Cost of goods sold	Finished goods inventory	Work In Process Inventory

Journal Entries - Marcelino Co
Event	Particulars	Debit	Credit
a	Raw material inventory Dr	$6,00,000.00
	To Accounts Payable		$6,00,000.00
	(To record purchase of raw material)
b	Work In Process Dr	$4,41,000.00
	To Raw material inventory		$4,41,000.00
	(To record raw material used in production)
c	Work In Process Dr	$3,63,000.00
	To Cash		$3,63,000.00
	(To record direct labor payment and assigment to production)
d	Factory overhead Dr	$22,000.00
	To Cash		$22,000.00
	(To record Indirect labor payment and assigment to factory overhead)
e	Work In Process Dr	$1,81,500.00
	To Factory Overhead		$1,81,500.00
	(To apply overhead to production)
f1	Factory Overhead Dr	$55,000.00
	To Raw material inventory		$55,000.00
	(To record indirect material used)
f2	Factory Overhead Dr	$33,000.00
	To Cash		$33,000.00
	(To record factory rent)
f3	Factory Overhead Dr	$23,000.00
	To Cash		$23,000.00
	(To record factory utilities)
f4	Factory Overhead Dr	$57,000.00
	To Accumulated Depreciation		$57,000.00
	(To record factory depreciation)
g	Finished goods inventory Dr	$8,51,000.00
	To Work In Process		$8,51,000.00
	(Being completed jobs transferred to finished goods)
h	Cost of goods sold Dr	$3,49,500.00
	To Finished goods inventory		$3,49,500.00
	(To record cost of goods sold for Job 306)
i	Cash Dr	$6,80,000.00
	To Sales Revenue		$6,80,000.00
	(To record sales of Job 306)
j	Cost of goods sold Dr	$8,500.00
	To Factory Overhead		$8,500.00
	(To close underapplied overhead to COGS)