Question

Exercise 3-5 Journal Entries and T-accounts [LO3-1, LO3-2) The Polaris Company uses a job-order costing system. The following transactions occurred in October: a. Raw materials purchased on account, $210,000. b. Raw materials used in production, $192,000 ($153,600 direct materials and $38,400 Indirect materials). c. Accrued direct labor cost of $48,000 and Indirect labor cost of $21,000. d. Depreciation recorded on factory equipment, $104,000. e. Other manufacturing overhead costs accrued during October, $131,000. f. The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine-hour. A total of 76,300 machine-hours were used in October. g. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods. h. Jobs that had cost $450,000 to complete according to their job cost sheets were shipped to customers during the month. These Jobs were sold on account at 36% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work In Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work In Process has a beginning balance of $34,000. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare journal entries to record the transactions given above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 3 5 6 7 8 9 > Raw materials purchased on account, $210,000. Note: Enter debits before credits. Transaction General Journal Debit Credit a Record entry Clear entry View general journal < Required 1 Required 2 >

Answer 1

1
	General Journal	Debit	Credit
a	Raw Materials	210000
	Accounts Payable		210000
b	Work in Process	153600
	Manufacturing Overhead	38400
	Raw Materials		192000
c	Work in Process	48000
	Manufacturing Overhead	21000
	Salaries and Wages Payable		69000
d	Manufacturing Overhead	104000
	Accumulated Depreciation		104000
e	Manufacturing Overhead	131000
	Accounts Payable		131000
f	Work in Process	457800		=76300*6
	Manufacturing Overhead		457800
g	Finished Goods	513000
	Work in Process		513000
h	Cost of Goods Sold	450000
	Finished Goods		450000
	Accounts Receivable	612000		=450000*1.36
	Sales		612000

	2
Manufacturing overhead					Work in Process
b	38400	457800	f		Beg. Bal.	34000
c	21000				b	153600	513000	g
d	104000				c	48000
e	131000				f	457800
End. Bal.		163400
					End. Bal.	180400