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Entries for costs in a job order cost system Munson Co. uses a job order cost system, the following data summarize the operations related to production for July: a. Materials purchased on account, $225,750 b. Materials requisitioned, $217,600, of which $17,600 was for general factory use C. Factory Labor used, $680,000, of which $72,300 was indirect d. Other costs incurred on account for factory overhead, $330,000; selling expenses, $180,000; and administrative expenses, $126,000 e. Prepaid expenses expired for factory overhead, $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250 f. Depreciation of office building was $44,500; of office equipment, $16,800; and of factory equipment, $55,100 g. Factory overhead costs applied to jobs, $548,000 h. Jobs completed, $1,140,000 i. Cost of goods sold, $1,128,000 Instructions Journalize the entries to record the summarized operations.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 19, Problem 19.1APR
Textbook Problem

Entries for costs in a job order cost system

Munson Co. uses a job order cost system, the following data summarize the operations related to production for July:

a. Materials purchased on account, $225,750

b. Materials requisitioned, $217,600, of which $17,600 was for general factory use C. Factory Labor used, $680,000, of which $72,300 was indirect

d. Other costs incurred on account for factory overhead, $330,000; selling expenses, $180,000; and administrative expenses, $126,000

e. Prepaid expenses expired for factory overhead, $27,500; for selling expenses, $8,100; and for administrative expenses, $5,250

f. Depreciation of office building was $44,500; of office equipment, $16,800; and of factory equipment, $55,100

g. Factory overhead costs applied to jobs, $548,000

h. Jobs completed, $1,140,000

i. Cost of goods sold, $1,128,000

Instructions

Journalize the entries to record the summarized operations.

Expert Solution
To determine

Job order costing

Job order cost system provides a separate record of each particular quantity of product that passes through the factory. Each quantity that is manufactured in the business is known as job. Job order costing is used when the products produced are significantly different from each other.

To record: the journal entry to record the summarized operations

Explanation of Solution

The journal entries of operations of Company M is as follows:

Date Account titles and Explanation Debit
($)
Credit
($)
a Materials 225,750  
      Accounts Payable   225,750
  (Record materials purchased)    
       
b Work in process 200,000  
  Factory overhead 17,600  
      Materials   217,600
  (Record material requisitioned to jobs)    
       
c Work in process 607,700  
  Factory overhead 72,300  
      Wages payable   680,000
  (Record factory labor used in production)    
       
d Factory overhead 330,000  
  Selling expenses 180,000  
  Administrative expenses 126,000  
      Accounts payable   636,000
  (Record other cost incurred in production)    
       
e Factory overhead 27,500  
  Selling expenses 8,100  
  Administrative expenses 5,250  
      Prepaid expenses   40,850
  (Record prepaid expenses expired for other cost)    
       
f Depreciation expense – Office building 44,500  
  Depreciation expense – Office Equipment 16,800  
  Factory overhead 55,100  
      Accumulated Depreciation expense –Building & Equipment  

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Chapter 19 Solutions

Accounting
Show all chapter solutions
Ch. 19 - Issuance of materials On May 7, Bergan Company...Ch. 19 - Issuance of materials On August 4, Rothchild...Ch. 19 - Direct labor costs During May, Bergan Company...Ch. 19 - Direct labor costs During August, Rothchild...Ch. 19 - Factory overhead costs During May, Bergan Company...Ch. 19 - Factory overhead costs During August, Rothchild...Ch. 19 - Applying factory overhead Bergan Company estimates...Ch. 19 - Applying factory overhead Rothchild Company...Ch. 19 - Job costs At the end of May, Bergan Company had...Ch. 19 - Job costs At the end of August, Rothchild Company...Ch. 19 - Transactions in a job order cost system Five...Ch. 19 - Cost of materials issuances under the FIFO method...Ch. 19 - Entry for issuing materials Materials issued for...Ch. 19 - Entries for materials GenX Furnishings...Ch. 19 - Entry for factory labor costs A summary of the...Ch. 19 - Entry for factory labor costs The weekly time...Ch. 19 - Entries for direct labor and factory overhead...Ch. 19 - Factory overhead rates, entries and account...Ch. 19 - Predetermined factory overhead rate Street....Ch. 19 - Predetermined factory overhead rate Poehling...Ch. 19 - Entry for jobs completed; cost of unfinished jobs...Ch. 19 - Entries for factory costs and jobs completed Old...Ch. 19 - Financial statements of a manufacturing firm The...Ch. 19 - Decision making with job order costs Alvarez...Ch. 19 - Decision making with job order costs Raneri...Ch. 19 - Job order cost accounting for a Service company...Ch. 19 - Job order cost accounting for a service company...Ch. 19 - Entries for costs in a job order cost system...Ch. 19 - Entries and schedules for unfinished jobs and...Ch. 19 - Job order cost sheet Remnant Carpet Company sells...Ch. 19 - Analyzing manufacturing cost accounts Fire Rock...Ch. 19 - Flow of costs and income statement Ginocera Inc....Ch. 19 - Entries for costs in a job order cost system Royal...Ch. 19 - Entries and schedules for unfinished Jobs and...Ch. 19 - Job order cost sheet Stretch and Trim Carpet...Ch. 19 - Analyzing manufacturing cost accounts Clapton...Ch. 19 - Flow of costs and income statement Technology...Ch. 19 - Communication TAC Industries sells heavy equipment...Ch. 19 - Predetermined overhead rates As an assistant cost...Ch. 19 - Communication Carol Creedence, the plant manager...Ch. 19 - Job order decision making and rate deficiencies...Ch. 19 - Recording manufacturing costs Todd Lay just began...

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