Question

1.

During May, Lockmiller Company accumulated 20,000 hours of direct labor costs on Job 275 and 24,200 hours on Job 310. The total direct labor was incurred at a rate of $19.00 per direct labor hour for Job 275 and $21.00 per direct labor hour for Job 310.

Required:

Journalize the entry on May 30 to record the flow of labor costs into production during May. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

2.

During May, Lockmiller Company incurred factory overhead costs as follows: indirect materials, $42,800; indirect labor, $99,200; utilities cost, $18,200; and factory depreciation, $49,000.

Required:

Journalize the entry to record the factory overhead incurred as of May 30. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

3.

Entries for Costs in a Job Order Cost System

Royal Technology Company uses a job order cost system. The following data summarize the operations related to production for March:

1. Materials purchased on account, $770,000
2. Materials requisitioned, $680,000, of which $75,800 was for general factory use
3. Factory labor used, $756,000, of which $182,000 was indirect
4. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600
5. Prepaid expenses expired for factory overhead, $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660
6. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900
7. Factory overhead costs applied to jobs, $568,500
8. Jobs completed, $1,500,000
9. Cost of goods sold, $1,375,000

Required:

Journalize the entries to record the summarized operations. If an amount box does not require an entry, leave it blank.

a. Materials purchased on account, $770,000.

Entry	Description	Debit	Credit
a.

b. Materials requisitioned, $680,000, of which $75,800 was for general factory use.

Entry	Description	Debit	Credit
b.

c. Factory labor used, $756,000, of which $182,000 was indirect.

Entry	Description	Debit	Credit
c.

d. Other costs incurred on account for factory overhead, $245,000; selling expenses, $171,500; and administrative expenses, $110,600.

Entry	Description	Debit	Credit
d.

e. Prepaid expenses expired for factory overhead, $24,500; for selling expenses, $28,420; and for administrative expenses, $16,660.

Entry	Description	Debit	Credit
e.

f. Depreciation of factory equipment was $49,500; of office equipment, $61,800; and of office building, $14,900.

Entry	Description	Debit	Credit
f.

g. Factory overhead costs applied to jobs, $568,500.

Entry	Description	Debit	Credit
g.

h. Jobs completed, $1,500,000.

Entry	Description	Debit	Credit
h.

i. Cost of goods sold, $1,375,000.

Entry	Description	Debit	Credit
i.

Answer 1

1.

General Journal	Debit	Credit
Work in process (20,000*$19)+(24,200*$21)	$888,200
Wages payable		$888,200

2.

General Journal	Debit	Credit
Factory overhead	$209,200
Raw material		$42,800
Wages payable		99,200
Utilities payable		18,200
Accumulated depreciation		49,000

3.

	General Journal	Debit	Credit
a	Raw material	$770,000
	Accounts payable		$770,000
b	Work in process	$604,200
	Factory overhead	75,800
	Raw material		$680,000
c	Work in process	$574,000
	Factory overhead	182,000
	Wages payable		$756,000
d	Factory overhead	$245,000
	Selling expense	171,500
	Administrative expense	110,600
	Accounts payable		$527,100
e	Factory overhead	$24,500
	Selling expense	28,420
	Administrative expense	16,660
	Prepaid expenses		$69,580
f	Factory overhead	$49,500
	Depreciation-Office equipment	61,800
	Depreciation-Office building	14,900
	Accumulated depreciation		$126,200
g	Work in process	$568,500
	Factory overhead		$568,500
h	Finished goods	$1,500,000
	Work in process		$1,500,000
i	Cost of goods sold	$1,375,000
	Finished goods		$1,375,000