Question

Findlay Company uses a job-order costing system. The following data relate to the month of October, the first month of the company’s fiscal year:

            10/1    Raw materials purchased on account, $ 210,000.

           

10/7    Raw materials issued to production, $ 190,000. ( 80% direct and 20%

                       indirect)

           

10/8    Direct labor cost issued to production, $49,000; and indirect labor cost incurred

                       $21,000)

           

10/22 The company applies manufacturing overhead cost to production on the

                        basis of $4.00 per machine hour. There were 75,000 machine hours

                        recorded for October.

           

10/25 Production orders costing $510,000 according to their job-cost sheets were

                        completed during October and transferred to Finished Goods.

10/29 Sales were made to customers. The cost of goods sold amounted to $370,000 of      

            goods from the warehouse.

Instructions: Prepare journal entries to record the information given above.

Answer 1

Journal entries
Date	Particulars			Debit	Credit
10-Jan	Raw material			210000
	accounts payable				210000
10-Jul	work in process			152000
	manufacturing overehead			38000
	raw material				190000
10-Aug	Work in process			49000
	manufacturing overhead			21000
	labour payable				70000
Oct-22	work in process			300000
	manufacturing overhead				300000
Oct-25	finished goods inventory			510000
	work in process				510000
Oct-29	cost of goods sold			370000
	finished goods inventory				370000