Question

Curtis Products manufactures garden tools. It uses a job costing system that allocates factory overhead on the basis of direct labor-costs. Budgeted factory overhead for the year 2019 was $558,000, and management budgeted $372,000 in direct labor costs. The company’s tax rate is 21% (Round income tax to the nearest dollar).

The trial balance of Curtis Products, Inc. on June 30, 2019 is as follows:
   Cash……………………………………………… $21,000
   Accounts Receivable……………………………..   65,000
   Finished Goods………………………………….. 103,000
   Work in Process………………………………….   31,000
   Materials ………………………………………… 19,000                  
Prepaid factory Insurance.....……………………… 6,000
   Machinery and Equipment (cost)………………   264,000
   Accumulated Depreciation………………………                                $70,000
   Accounts Payable………………………………..                                  99,000
   Common Stock…………………………………….                             200,000
   Retained Earnings………………………………                                 140,000
   Total …………………………………………   $509,000                $509,000
During July, the following transactions took place:

July 1. Purchased raw materials for $45,000 and factory supplies for $3,000 on account. (Record
            materials and supplies in the materials control account)
        2. Received a $50,000 loan from First National Bank to be repaid in 5 years.
       3. Declared a $1,500 cash dividend.  

       3. Issued raw materials to production, $52,000
       5. Paid factory utility bill, $10,230 in cash.
    15. Received a bill for July’s janitorial services, $4,500. This amount has not yet been paid.

      16. Used factory supplies costing $1,000. (Indirect manufacturing cost).
      20. Incurred research & development expense on account, $6,000.
     22. Paid other factory overhead costs, $12,500.
      23. Incurred selling expenses on account, $6,150.
      28. Paid cash dividend, $1,500.
     25. Incurred payroll costs of $45,000 (not yet paid). Of this amount, $30,000 were direct labor costs
             and $15,000 indirect labor cost.
      27. Incurred restructuring costs totaling $15,000 on account.

     27. Incurred administrative expenses on account, 7,100.
     28. Prepaid factory insurance expired, $1,750.
      28. Paid payroll costs, $45,000.
      30. Record depreciation for July. Depreciation rate is 10% per annum on the cost of machinery and equipment.
             One-fifth of this depreciation is for office equipment and the remainder for factory equipment.
      30. Allocate manufacturing overhead costs to production on the basis of direct labor costs.
      31. Completed and transferred goods with a total cost of $95,000 to the finished goods storeroom.
      31. Sold goods costing $185,000 for $374,000. (Assume all sales were made on account).
     31. Paid accounts payable totaling, $158,000
      31. Collected accounts receivable in the amount of $320,000.
      31. Accrue $400 interest expense.
      31.   Calculate the overallocated or underallocated overhead and close this amount to the Cost of Goods Sold account.

Required
1. Prepare a classified balance sheet for July 2019.

Answer 1

Here's the TB in order to prepare Classified Balance sheet:

	Trial Balance of Curtis Products for the month of July 2019
		Before Adjustment Entries		Adjustment Entries		After Adjustment Entries
Sl #	Account Details	Debit	Credit	Debit	Credit	Debit	Credit	Explanation
	Cash	21,000		370,000	227,230	163,770		Increase due to loanreceived + AR collected Decrease as per expenses paid + AP Paid
	AR	65,000		374,000	320,000	119,000		Increase as per Sales made Decrease as per AR Collected
	Finished Goods	103,000		95,000	187,233	10,767		Increase as per received from WIP Decrease as per sales made+ Cost of goods sold + Manufacuring OH
	WIP	31,000		52,000	95,000		12,000	Increase as received Materials from production Decrease as goods moved to Finished goods
	Materials	19,000		48,000	52,000	15,000		Increase as per purchases made Decrease as goods moved to WIP
	Prepaid factory insurance	6,000			1,750	4,250
	Machinery & Equipment (M&E)	264,000				264,000
	Accumulated Depreciation Acct		70,000		26,400		96,400
	AP		99,000	203,000	131,750		27,750	Increase as per expense incurred Decrease as per payments made
	Stock		200,000				200,000
	Retained Earnings		140,000	1,500			179,372	Increase as per gain on sale of goods less Sum of exp items from 1 - 15 Decrease as dividends declared
	Taxes Payable				10,865		10,865
	Accrued Interest				400		400
	Loan				50,000		50,000	Credit in Cash Acct
	Dividend			1,500	1,500		-
1	Factory Utility Bill			10,230				Credit in Cash Acct
2	Janitorial service			4,500				Credit in AP Acct
3	Indirect Manufacturing cost allocated to production on the basis of direct labor cost			667				Credit In Finished Goods Acct
4	Indirect Manufacturing cost allocated to production on the basis of direct labor cost			333				Credit In Finished Goods Acct
5	R&D Exp			6,000				Credit in AP Acct
6	Factory OH Cost			12,500				Credit in Cash Acct
7	Selling Exp			6,150				Credit in AP Acct
8	Payroll Cost			45,000				Credit in AP Acct
9	Restructing cost			15,000				Credit in AP Acct
10	Administrative exp			7,100				Credit in AP Acct
11	Factory Insurance			1,750				Credit in Prepaid insurance Acct
12	Factory Depreciation (4/5th of 10% of depr on M&E)			21,120				Credit in Accumulated Depreciation acct
13	Office Depreciation (1/5th of 10% of depr on M&E)			5,280				Credit in Accumulated Depreciation acct
	Gain on sale of goods				189,000			Credit in Finished goods acct $ 185000 & Debit in AR of $ 374000
14	Interest Exp			400				Credit in Accrued Interest acct
15	Cost of Goods sold (See below calculation)			1,233				Credit In Finished Goods Acct
16	Taxes @ 21%			10,865				Credit in Taxes Payable Acct
		509,000	509,000	1,293,128	1,293,128	576,787	576,787

Please find below Classified Balance sheet:

Balance Sheet of Curtis Products Inc
As of July 31, 2019
Assets	Amount (EUR)	Liabilities & Equity	Amount (EUR)
Current Assets		Current Liabilities
Cash on Hand	163,770	Accounts Payable	27,750
Inventory	13,767	Taxes Payable	10,865
Accounts Receivable	119,000	Accrued Interest	400
Prepaid Factory Insurance	4,250	Long Term Liabilities
Investments		Loan Payable in 5 years	50,000
Fixed Assets
Equipment	264,000	Equity:
Less: Accumulated Depreciation	(96,400)	Stockholders Equity	200,000
Intangible & Other Assets		Retained Earnings	179,372
Total Assets	468,387	Total Liabilities & Equity	468,387