Question

Use the information below to answer the following two questions: Ginseng Inc. uses a normal cost system to account for jobs it produces and closes out any one or under-applied manufacturing overhead directly to Cost of Goods Sold at the end of each quarter. Beginning balances from the Balance Sheet on January lane shown in the table below. The table uses the following abreviations RM -Raw Materials Inventory AP Accounts Payable WIP Work in Process Inventory RE-Retained Earnings FG = Finished Goods Inventory MOH - Manufacturing Overhead Beg - Beginning Balance End Ending Balance PP&E - Property. Plant & Equipment A summary of transactions completed in the quarter are shown below in SL.001: a. Raw materials purchased on account 2 S 22 b. Raw materials used in production (75% were direct; the remainder indirect) $ 100 Salaries & wages paid in cash (70% Direct: 20% indirect: 10% selling & adnih s 30 Depreciation on PP&E (90% manutsturing: the remainder selling & admin 6 S c. Factory utility expenses paid on account 5 34 f. Advertising expenses paid in cash s 18 Manufacturing overhead applied to production 99 h. Cost of goods manufactured 204 i Cash sales to customers 5 375 j Cost of goods sold (unadjusted) $ 180 k Underapplied or overapplied overhead closed entirely to Cost of Goods Sold C S S To answer the following two questions, enter the numbers relevant for each calculation into the table helowing positive numbers to designate increases to an account balance and negative numbers to designate decreases Cash RM WIP MOH FG $19 PP&E S120 PRE $28 $253 Beg $39 $89 $14 SO * b. (lon) c. (0) 10 LT) d. (60) 16) e. C4) 24 1. 2182 (1) h. Dot) 204 i. 375 315 j. 1080) k. & 10 & 4 312 1 1943 0 60 16.40 19 The amount of underapplied or overapplied overhead closed entirely to Cost of Goods Sold transaction was S24 B. S30 $35 D $14 E SII End Tr Net operating? R/E- Retañed on B B 20 The endine halance in Finished Gods Inventory was:

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Answer 1

Accounts Payable No. Cash Retained Earnings 28 253 22 120 = a. Manufact Raw Work in Finished uring Materials process Goods Overhead PP&E 39 89 14 19 0 22 -100 75 25 -50 35 10 54 34 = b. c. == -5 -6 d. -60= Particulars Beginning Balance Raw material purchased Raw material consumed Salaries and wages paid Depreciation on equipment Factory Utility cost incurred Advertisement incurred Manufacturing overhead applied Cost of goods manufactured Sales on cash Cost of goods sold Over-applied overhead e. = 34 f. -18 -18 99 -99 = -204 204 g. h. i. lj. k. 375 = -180 375 -180 -24 395 = -24 0 346 11 19 43 601= 84 479 479 The Over-applied overhead is $ 24 the option A is Correct

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