Question

APC Ltd operate a job costing system for its production costs. The following balances appeared as at 31 October DR CR Raw materials control $12,600 Work in progress $29,200 Finished goods $18,400 Labour control (accrued factory wagesl $2,700 Factory overhead applied $500 During November, the following transactions took place: Bought materials on credit lexcluding GST $45,900 Paid factory payroll $60,000 Factory labour distribution for the month was: Direct labour $54,000 Indirect labour $8,500 Material issued: Direct $37,300 Indirect $7,400 $1,400 Factory insurance expired $4,200 Prepaid factory rent expired Orders completed during November cost Orders which cost $125,000 were invoiced lexcluding GST $126,900 $198,000 Additional information Depreciation of factory assets (cost $264,000) at the rate of 15% p.a. Factory overhead applied to production at the rate of 60 % of Direct Labour cost Required: Prepare the journal entries for all the above November transactions [including monthly depreciation of factory assets] with the following template. No need to write the short description for each journal entry. Show the necessary calculations when recording the above additional information. Accounts DR CR

Answer 1

Journal Entries:

Date	Accounts and Explanations	Debit	Credit
	Raw Materials	$45,900
	Accounts Payable		$45,900
	(To record the purchase of materials on account)
	Factory Wages	$60,000
	Cash		$60,000
	(To record the factory payroll paid)
	Work-in Process Inventory	$54,000
	Direct Labor		$54,000
	(To record the disbursement of direct labor)
	Manufacturing Overheads	$8,500
	Indirect Labor		$8,500
	(To record the disbursement of indirect labor)
	Work-in Process Inventory	$37,300
	Direct Materials		$37,300
	(To record the disbursement of direct materials)
	Manufacturing Overheads	$7,400
	Indirect Materials		$7,400
	(To record the disbursement of indirect materials)
	Factory Insurance Expense	$1,400
	Prepaid Factory Insurance		$1,400
	(To record the expiration of factory insurance)
	Factory Rent Expense	$4,200
	Prepaid Factory Rent		$4,200
	(To record the expiration of factory rent)
	Manufacturing Overheads	$32,400
	Factory Overheads ($54,000*60/100)		$32,400
	(To record the application of factory overheads)
	Finished Goods Inventory	$126,900
	Work-in Process Inventory		$126,900
	(To record the orders completed for November cost)
	Accounts Receivable	$198,000
	Salas Revenue		$198,000
	(To record the sale of orders which invoiced)
	Cost of Goods Sold	$125,000
	Finished Goods Inventory		$125,000
	(To record cost of goods sold)
	Depreciation Expense - Factory Assets ($264,000*15/100)	$39,600
	Accumulated Depreciation - Factory Assets		$39,600
	(To record the depreciation on factory assets)