ABC Company received an order to make school uniforms and uses the job order costing system. The following transaction occurred during 2021 relating to Job U-101:Purchased raw materials at a cost of P2,000,000Direct materials used for 1,400,000Raw materials were used as indirect materials, P200,000Direct labor hours consumed for P1,500,000 on the job, which was fully paid.Indirect labor hours used costing P500,000Other indirect costs accrued were $1,250,000Manufacturing overhead equal to 100% of direct labor was charged.The cost of U-101 of 24,400,000 (direct materials of P1,400,000 + direct labor cost of P1,500,000 + applied overhead of P1,500,000) was transferred to finished goods on completion.Revenue is recorded at P5,720,000 (P4,400,000 x 130%)Actual manufacturing overheads were P1,950,000 (indirect materials costing P200,000+ indirect labor costing P500,000 and other overheads of P1,250,000). Applied manufacturing overheads were P1,500,000. The manufacturing overheads worth P450,000 were under-applied and are taken to the cost of goods sold or income statement.Required: Journal entries to record the above transactions

Name: ABC Company received an order to make school uniforms and uses the job
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Description: ABC Company received an order to make school uniforms and uses the job order costing system. The following transaction occurred during 2021 relating to Job U-101:Purchased raw materials at a cost of P2,000,000Direct materials used for 1,400,000Raw ma

Journal entries recording is the initial step of accounting cycle process, under which atleast one…

Answered: ABC Company received an order to make…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 12PA: The following data summarize the operations during the year. Prepare a journal entry for each...

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ABC Company received an order to make school uniforms and uses the job order costing system.

The following transaction occurred during 2021 relating to Job U-101:

Purchased raw materials at a cost of P2,000,000
Direct materials used for 1,400,000
Raw materials were used as indirect materials, P200,000
Direct labor hours consumed for P1,500,000 on the job, which was fully paid.
Indirect labor hours used costing P500,000
Other indirect costs accrued were $1,250,000
Manufacturing overhead equal to 100% of direct labor was charged.
The cost of U-101 of 24,400,000 (direct materials of P1,400,000 + direct labor cost of P1,500,000 + applied overhead of P1,500,000) was transferred to finished goods on completion.
Revenue is recorded at P5,720,000 (P4,400,000 x 130%)
Actual manufacturing overheads were P1,950,000 (indirect materials costing P200,000+ indirect labor costing P500,000 and other overheads of P1,250,000). Applied manufacturing overheads were P1,500,000. The manufacturing overheads worth P450,000 were under-applied and are taken to the cost of goods sold or income statement.

Required: Journal entries to record the above transactions

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