1.
Introduction:
Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.
Allocation of the service department’s cost to the consuming department and the predetermined overhead rates in the operating department.
2.
Introduction:
Direct method: Under the direct method, the overhead costs incurred by the supporting department are directly allocated to the operating department.
Allocation of the service department’s cost to the consuming department using the direct method and the predetermined overhead rate.
3.
a.
Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.
The amount of overhead cost for the job using overhead rates computed in parts 1 and 2.
3.
b.
Step-down method: The overhead costs of supporting incurred by the supporting department are allocated to other supporting departments and also the operating department based on the allocation base.
The reason the step-down method is a better base for computing the predetermined rates than the direct method.
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FUNDAMENTAL ACCOUNTING PRINCIPLES
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- 19. After the posting of the accounts payable ledger and general ledeer is completed, the total of the accounts payable ledger balances should equal the general ledger balance of a. Purchases. Da 20 Jan b. Accounts Receivable. С. Accounts Payable. d. Purchases Returns and Allowances. 20. Amounts are posted individually from the purchases journal to the Credit column of the creditors' accounts in the accounts payable ledger. b. Credit column of the Inventory account in the general ledger. c. Credit column of the Accounts Receivable account in the general ledger. d. Debit column of the Cash account in the general ledger. a. 454arrow_forwardPrepare the journal entries to record these transactions on the book of Swifty cO.under a perpetual inventory systemarrow_forwardExercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $370,000 for real estate plus $19,610 in closing costs. The real estate consists of land appraised at $188,000; land improvements appraised at $70,500; and a building appraised at $211,500. Required: 1. Allocate the total cost among the three purchased assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Percent of Total Appraised Value Appraised Value x Total Cost of Acquisition = Apportioned Cost Land Land improvements Building Totalsarrow_forward
- Compu/t/e the General Ledger, Account: Purchases Account: Sales returning allowancearrow_forwardUsing the chart of accounts below. Prepare a journal entries of Quarantino Covidap under perpetual inventory system. Thank you!arrow_forwardIdentify Postings from Purchases Journal Using the following purchases journal, identify each of the posting references, indicated by a letter, as representing (1) a posting to a general ledger account, (2) a posting to a subsidiary ledger account, or (3) that no posting is required: PURCHASES JOURNAL Page 49 Date Account Credited Post.Ref. AccountsPayableCr. StoreSuppliesDr. OfficeSuppliesDr. OtherAccountsDr. Post.Ref. Amount 20Y9 Jan. 4 Coastal Equipment Co. (a) 5,325 Warehouse Equipment (g) 5,325 Jan. 6 Arrow Supply Co. (b) 4,000 4,000 Jan. 9 Valley Products (c) 1,875 1,600 275 Jan. 14 Office Warehouse (d) 2,200 Office Equipment (h) 2,200 Jan. 20 Office Warehouse (e) 6,000 Store Equipment (i) 6,000 Jan. 25 Metro Supply Co. (f) 2,740 2,740 Jan. 30 22,140 4,340 4,275 13,525 (j) (k) (l) (m) Post reference represents: a. b. c.…arrow_forward
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