Question

The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.
  

	April 30				May 31
Inventories
Raw materials	$	43,000			$	52,000
Work in process		10,200				21,300
Finished goods		63,000				35,600
Activities and information for May
Raw materials purchases (paid with cash)						210,000
Factory payroll (paid with cash)						345,000
Factory overhead
Indirect materials						15,000
Indirect labor						80,000
Other overhead costs						120,000
Sales (received in cash)						1,400,000
Predetermined overhead rate based on direct labor cost						70	%
1. Raw materials purchases for cash. 2. Direct materials usage. 3. Indirect materials usage. 4. Incurred other overhead costs (record credit to Other Accounts). 5. Application of overhead to work in process. Prepare journal entries for the above transactions for the month of May.

Answer 1

1	Raw materials inventory	210000
	Cash		210000
2	Work in Process inventory	186000		=43000+210000-52000-15000
	Raw materials inventory		186000
3	Factory overhead	15000
	Raw materials inventory		15000
4	Factory overhead	120000
	Other accounts		120000
5	Work in Process inventory	185500		=(345000-80000)*70%
	Factory overhead		185500