Question

Christopher’s Custom Cabinet Company uses a job order cost system with overhead applied as a percentage of direct labor costs. Inventory balances at the beginning of 2016 follow:

Raw Materials Inventory   $   16,500
Work in Process Inventory      5,900
Finished Goods Inventory      20,800

The following transactions occurred during January:
(a) Purchased materials on account for $26,700.
(b) Issued materials to production totaling $20,600, 90 percent of which was traced to specific jobs and the remainder of which was treated as indirect materials.
(c) Payroll costs totaling $16,900 were recorded as follows:
$11,700 for assembly workers
1,200 for factory supervision
1,900 for administrative personnel
2,100 for sales commissions
(d) Recorded depreciation: $4,400 for machines, $500 for the copier used in the administrative office.
(e) Recorded $1,300 of expired insurance. Forty percent was insurance on the manufacturing facility, with the remainder classified as an administrative expense.
(f) Paid $5,000 in other factory costs in cash.
(g) Applied manufacturing overhead at a rate of 200 percent of direct labor cost.
(h) Completed all jobs but one; the job cost sheet for this job shows $2,300 for direct materials, $2,300 for direct labor, and $4,600 for applied overhead.
(i) Sold jobs costing $50,000. The revenue earned on these jobs was $65,000.

Required:
1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: (Post all amounts separately. Do not combine/add any dollar amounts when posting to the t-accounts.)

Raw Materials Inventory.
Work in Process Inventory.
Finished Goods Inventory.
Cost of Goods Sold.
Selling, General, and Administrative Expenses.
Sales Revenue.
Other accounts (Cash, Payables, etc.).

Answer 1