Question

Required information

Problem 15-3A Source documents, journal entries, and accounts in job order costing LO P1, P2, P3

[The following information applies to the questions displayed below.]

Widmer Watercraft’s predetermined overhead rate for the year 2017 is 200% of direct labor. Information on the company’s production activities during May 2017 follows.

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a. Purchased raw materials on credit, $200,000.

b. Materials requisitions record use of the following materials for the month.

Job 136	$	49,500
Job 137		32,500
Job 138		19,200
Job 139		22,800
Job 140		6,400
Total direct materials		130,400
Indirect materials		21,500
Total materials used	$	151,900

c. Paid $15,250 cash to a computer consultant to reprogram factory equipment.

d. Time tickets record use of the following labor for the month. These wages were paid in cash.

Job 136	$	12,000
Job 137		10,600
Job 138		38,100
Job 139		39,400
Job 140		3,400
Total direct labor		103,500
Indirect labor		24,500
Total	$	128,000

e. Applied overhead to Jobs 136, 138, and 139.

f. Transferred Jobs 136, 138, and 139 to Finished Goods.

g. Sold Jobs 136 and 138 on credit at a total price of $545,000.

h. The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance).

Depreciation of factory building	$	68,500
Depreciation of factory equipment		38,000
Expired factory insurance		11,000
Accrued property taxes payable		36,500

i. Applied overhead at month-end to the Work in Process Inventory account (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost.

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Problem 15-3A Part 2

2. Prepare journal entries to record the events and transactions a through i.

Answer 1

A. Material a/c dr 200,000

To creditor a/c. 200,000

B. Job/ work in progress a/c. Dr. 130400

Overhead a/c. Dr. 21500

To material a/c. 151900

C. Repairs and maintenance a/c. Dr. 15250

To cash. 15250

D. Job/work in progress a/c. Dr. 103,500

Overhead a/c dr. 24500

To cash a/c. 128000

E. Finished goods a/c. Dr. 179000

To overhead a/c. 179000

F. Finished goods a/c. . Dr. 161400

To job a/c / work in progress a/c. 161400

G. Cost of goods sold a/c. Dr. 1188000

To finished. Goods a/c. 1188000

H. Overhead a/c dr 154000

To expenses. 154000

I job a/c / wip a/c. 21000

To overhead a/c. 21000