Question

Josie Inc. has provided the following information for the year ended 20x8:

1. Purchased raw materials on account for $121,600.
2. Issued $114,300 in raw materials to production ($20,600 were not traceable to specific jobs).
3. Incurred $100,723 in direct labor costs (14,389 hours) and $61,000 in supervision costs (paid in cash).
4. Incurred the following additional manufacturing overhead costs: factory lease $23,200 (paid in cash); depreciation on equipment $19,500; custodial supplies $7,400 (paid in cash).
5. Incurred the following nonmanufacturing costs, both paid in cash: advertising $74,300; sales commissions $86,300.
6. Applied manufacturing overhead to jobs in process at a rate of $12 per direct labor hour.
7. Completed jobs costing a total of $343,000.
8. Sold jobs for $426,200 on account. The cost of the jobs was $340,100.
9. Closed the Manufacturing Overhead account balance.

Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal Entries:

Account Titles and Explanations	Debit	Credit
Raw Materials Inventory	$121,600
Accounts Payable		$121,600
(To record the purchase of raw materials on account)
Work-in Process Inventory	$93,700
Direct Materials ($114,300 - $20,600)		$93,700
(To record the issue of direct materials to the production)
Manufacturing Overheads	$20,600
Indirect Materials		$20,600
(To record the issue of indirect materails to the production)
Direct Labor	$100,723
Supervision Costs	$23,200
Cash ($100,723 + $23,200)		$123,923
(To record the payment of direct labor and supervision costs)
Manufacturing Overheads	$23,200
Cash		$23,200
(To record the payment of manufacturing overheads)
Depreciation Expense	$19,500
Accumulated Depreciation - Equipment		$19,500
(To record the depreciation on the equipment)
Supplies	$7,400
Cash		$7,400
(To record the purchase of supplies by cash)
Advertising Expenses	$74,300
Sales Commission	$86,300
Cash		$160,600
(To record the payment of non-mmanufacturing costs)
Work-in Process Inventory	$172,668
Manufacturing Overheads (14,389 direct labor hours * $12 per hour)		$172,668
(To record application of manufacturing overheads to the production)
Finished Goods Inventory	$343,000
Work-in Process Inventory		$343,000
(To record the completion of jobs and transferred to finished goods inventory)
Accounts Receivable	$426,200
Sales Revenue		$426,200
(To record sales made on account)
Cost of Goods Sold	$340,100
Finished Goods Inventory		$340,100
(To record the cost of goods sold)