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Exercise 15-10 (Algo) Recording materials, labor, overhead, and sales; computing inventory cost LO P1, P2, P3 Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,500, direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $28,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July.     Job 120 Job 121 Job 122 Direct materials used $ 1,100 $ 8,100 $ 3,900 Direct labor used 2,300 4,400 2,300   1. Prepare journal entries for the following July transactions and events a through e. a. Direct materials used. b. Direct labor used. c. Overhead applied. d. Sale of Job 120. e. Cost of goods sold for Job 120. Hint: Job 120 has costs from June and July. 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June 30.)

Exercise 15-10 (Algo) Recording materials, labor, overhead, and sales; computing inventory cost LO P1, P2, P3 Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,500, direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $28,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July.     Job 120 Job 121 Job 122 Direct materials used $ 1,100 $ 8,100 $ 3,900 Direct labor used 2,300 4,400 2,300   1. Prepare journal entries for the following July transactions and events a through e. a. Direct materials used. b. Direct labor used. c. Overhead applied. d. Sale of Job 120. e. Cost of goods sold for Job 120. Hint: Job 120 has costs from June and July. 2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June 30.)

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 63P: (Appendix 4A) Journal Entries, T-Accounts Lowder Inc. builds custom conveyor systems for warehouses...
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Exercise 15-10 (Algo) Recording materials, labor, overhead, and sales; computing inventory cost LO P1, P2, P3

Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $6,500, direct labor of $4,100, and applied overhead of $3,485. Custom Cabinetry applies overhead at the rate of 85% of direct labor cost. During July, Job 120 is sold (on credit) for $28,500, Job 121 is started and completed, and Job 122 is started and still in process at the end of July. Custom Cabinetry incurs the following costs during July.
 

  Job 120 Job 121 Job 122
Direct materials used $ 1,100 $ 8,100 $ 3,900
Direct labor used 2,300 4,400 2,300

 
1. Prepare journal entries for the following July transactions and events a through e.

a. Direct materials used.
b. Direct labor used.
c. Overhead applied.
d. Sale of Job 120.
e. Cost of goods sold for Job 120. Hint: Job 120 has costs from June and July.

2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory accounts. (There were no jobs in Finished Goods Inventory at June 30.)
 

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