Question

The following events occurred over the course of a year at Bonita Corp., which uses a job order costing system:

1.	Direct materials purchases totaled $581,000. Bonita Corp tracks its direct materials separately from its indirect materials. Purchases were made on account.
2.	$131,000 of indirect materials were used in production. Bonita uses a separate Supplies Inventory account for indirect materials.
3.	$569,000 of direct materials were used in production.
4.	The direct labor payroll was $791,000 (credit Wages Payable).
5.	Other manufacturing overhead costs incurred during the year totaled $670,000.
6.	Bonita applies overhead based on a predetermined overhead rate of $24 per machine hour. The company used 48,000 machine hours during the year.
7.	During the year, Bonita transferred goods costing $2,470,000 into the Finished Goods Inventory account.
8.	Bonita sold products with a manufacturing cost of $2,398,000 to customers during the year.

(a)

Prepare journal entries to record these events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Post entries in order presented in the problem.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title to record purchase of direct materials	enter a debit amount	enter a credit amount
	enter an account title to record purchase of direct materials	enter a debit amount	enter a credit amount
	(To record purchase of direct materials)
2.	enter an account title to record use of indirect materials in production	enter a debit amount	enter a credit amount
	enter an account title to record use of indirect materials in production	enter a debit amount	enter a credit amount
	(To record use of indirect materials in production)
3.	enter an account title to record use of direct materials in production	enter a debit amount	enter a credit amount
	enter an account title to record use of direct materials in production	enter a debit amount	enter a credit amount
	(To record use of direct materials in production)
4.	enter an account title to record direct labor payroll	enter a debit amount	enter a credit amount
	enter an account title to record direct labor payroll	enter a debit amount	enter a credit amount
	(To record direct labor payroll)
5.	enter an account title to record actual manufacturing overhead	enter a debit amount	enter a credit amount
	enter an account title to record actual manufacturing overhead	enter a debit amount	enter a credit amount
	(To record actual manufacturing overhead)
6.	enter an account title to record applied manufacturing overhead	enter a debit amount	enter a credit amount
	enter an account title to record applied manufacturing overhead	enter a debit amount	enter a credit amount
	(To record applied manufacturing overhead)
7.	enter an account title to record transfer of completed goods to finished goods inventory	enter a debit amount	enter a credit amount
	enter an account title to record transfer of completed goods to finished goods inventory	enter a debit amount	enter a credit amount
	(To record transfer of completed goods to Finished Goods Inventory)
8.	enter an account title to record cost of goods sold for the period	enter a debit amount	enter a credit amount
	enter an account title to record cost of goods sold for the period	enter a debit amount	enter a credit amount
	(To record cost of goods sold for the period)

Answer 1

	No.	Account Titles and Explanation	Debit	Credit
	1	Direct Materials Inventory	$581,000
		Accounts Payable		$581,000
		(To record purchase of direct materials)
	2	Manufacturing Overhead	$131,000
		Supplies Inventory		$131,000
		(To record use of indirect materials in production)
	3	Work in process inventory	$569,000
		Direct Materials Inventory		$569,000
		(To record use of direct materials in production)
	4	Work in process inventory	$791,000
		Wages Payable		$791,000
		(To record direct labor payroll)
	5	Manufacturing Overhead	$670,000
		Cash		$670,000
		(To record actual manufacturing overhead)
	6	Work in process inventory	$1,152,000		(48000*$24)
		Manufacturing Overhead		$1,152,000
		(To record applied manufacturing overhead)
	7	Finished Goods Inventory	$2,470,000
		Work in process inventory		$2,470,000
		(To record transfer of completed goods to Finished Goods Inventory)
	8	Cost of goods sold	$2,398,000
		Finished Goods Inventory		$2,398,000
		(To record cost of goods sold for the period)