Question

Need some help with part 2 preparing the journal entry.

Widmer Watercraft's predetermined overhead rate is 200% of direct labor. Information on the company's production activities during May follows. a. Purchased raw materials on credit, $220,000. b. Materials requisitions record use of the following materials for the month. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct materials Indirect materials Total materials used $ 50,000 33,000 19,800 23,400 6,800 133,000 20,000 $153,000 c. Paid $15,250 cash to a computer consultant to reprogram factory equipment. d. Time tickets record use of the following labor for the month. These wages were paid in cash. Job 136 Job 137 Job 138 Job 139 Job 140 Total direct labor Indirect labor Total $ 12,200 10,700 37,700 39,000 3,400 103,000 24,000 $127,000 e. Applied overhead to Jobs 136, 138, and 139. f. Transferred Jobs 136, 138, and 139 to Finished Goods. g. Sold Jobs 136 and 138 on credit at a total price of $540,000. h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). Depreciation of factory building $69,000 Depreciation of factory equipment 37,500 Expired factory insurance 12,000 Accrued property taxes payable 36,500 1. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

a. Record raw material purchases on credit.

b. Record the requisition of direct and indirect materials.

c. Record payment to computer consultant to reprogram factory equipment.

d. Record the entry for direct and indirect labor, paid in cash.

e. Record the entry to apply overhead to jobs 136, 138 and 139.

f. Record the transfer of completed jobs 136,138 and 139 to finished goods.

g(1). Record the entry for sales on account for Jobs 136 and 138.

g(2). Record the entry for the cost of sales of Jobs 136 and 138.

h. Record other factory overhead (depreciation, insurance and property taxes).

i. Record the entry to apply overhead to Jobs 137 and 140 (Work in Process).

Answer 1

Solution 2:

	Job No. 136	Job No. 137	Job No. 138	Job No. 139	Job No. 140
Materials	$50,000.00	$33,000.00	$19,800.00	$23,400.00	$6,800.00
Labor	$12,200.00	$10,700.00	$37,700.00	$39,000.00	$3,400.00
Overhead	$24,400.00	$21,400.00	$75,400.00	$78,000.00	$6,800.00
Total cost	$86,600.00	$65,100.00	$132,900.00	$140,400.00	$17,000.00

Journal Entries - Widmer Watercraft
Event	Particulars	Debit	Credit
a	Raw material inventory Dr	$220,000.00
	To Accounts Payable		$220,000.00
	(To record purchase of raw material)
b	Work In Process Dr	$133,000.00
	Factory overhead Dr	$20,000.00
	To Raw material inventory		$153,000.00
	(To record raw material used in production)
c	Factory overhead Dr	$15,250.00
	To Cash		$15,250.00
	(Cash paid to consultant for reporgram factory equipment)
d	Work In Process Dr	$103,000.00
	Factory overhead Dr	$24,000.00
	To Cash		$127,000.00
	(To record direct and indirect labor payment and assigment to production)
e	Work In Process Dr	$177,800.00
	To Factory Overhead		$177,800.00
	(To apply overhead to Job 136, 138, 139)
f	Finished goods inventory Dr	$359,900.00
	To Work In Process		$359,900.00
	(Being completed jobs transferred to finished goods)
g1	Accounts receivables Dr	$540,000.00
	To Sales Revenue		$540,000.00
	(To record sales of Job 136 and 138)
g2	Cost of goods sold Dr	$219,500.00
	To Finished goods inventory		$219,500.00
	(To record cost of goods sold for Job 136 and 138)
h	Factory overhead Dr	$155,000.00
	To Accumulated depreciation - Factory Building		$69,000.00
	To Accumulated depreciation - Factory Equipment		$37,500.00
	To Prepaid insurance		$12,000.00
	To Property taxes payable		$36,500.00
	(To record overhead incurred)
i	Work In Process Dr	$28,200.00
	To Factory Overhead		$28,200.00
	(To apply overhead to Job 137 and 140)