Parador Company produces variations of its product, a megatron, in response to custom orders from its customers.

Question:

Parador Company produces variations of its product, a megatron, in response to custom orders from its customers. On June 1, the company had no inventories of goods in process or finished goods but held the following raw materials.

On June 3, the company began working on two megatrons: Job 450 for Doso Company and Job 451 for Border, Inc.

Required
Follow instructions in this list of activities and complete the sheets provided in the working papers.
a. Purchased raw materials on credit and recorded the following information from receiving reports and invoices.
Receiving Report No. 20, Material M, 150 units at $400 each.
Receiving Report No. 21, Material R, 70 units at $320 each.
Instructions:
Record these purchases with a single journal entry and post it to general ledger T-accounts, using the transaction letter a to identify the entry. Enter the receiving report information on the materials ledger cards.
b. Requisitioned the following raw materials for production.
Requisition No. 223, for Job 450, 80 units of Material M.
Requisition No. 224, for Job 450, 60 units of Material R.
Requisition No. 225, for Job 451, 40 units of Material M.
Requisition No. 226, for Job 451, 30 units of Material R.
Requisition No. 227, for 12 units of paint.
Instructions:
Enter amounts for direct materials requisitions on the materials ledger cards and the job cost sheets. Enter the indirect material amount on the materials ledger card and record a debit to the Indirect
Materials account in the subsidiary factory overhead ledger. Do not record a journal entry at this time.
c. Received the following employee time tickets for work in June.
Time tickets Nos. 1 to 10 for direct labor on Job 450, $80,000.
Time tickets Nos. 11 to 20 for direct labor on Job 451, $64,000.
Time tickets Nos. 21 to 24 for equipment repairs, $24,000.
Instructions: Record direct labor from the time tickets on the job cost sheets and then debit indirect labor to the Indirect Labor account in the subsidiary factory overhead ledger. Do not record a journal entry at this time.
d. Paid cash for the following items during the month: factory payroll, $168,000, and miscellaneous overhead items, $73,600.
Instructions:
Record these payments with journal entries and post them to the general ledger accounts.
Also record a debit in the Miscellaneous Overhead account in the subsidiary factory overhead ledger.
e. Finished Job 450 and transferred it to the warehouse. The company assigns overhead to each job with a predetermined overhead rate equal to 70% of direct labor cost.
Instructions:
Enter the allocated overhead on the cost sheet for Job 450, fill in the cost summary section of the cost sheet, and then mark the cost sheet €œFinished.€ Prepare a journal entry to record the job€™s completion and its transfer to Finished Goods and then post it to the general ledger accounts.
f. Delivered Job 450 and accepted the customer€™s promise to pay $580,000 within 30 days.
Instructions:
Prepare journal entries to record the sale of Job 450 and the cost of goods sold. Post them to the general ledger accounts.
g. Applied overhead cost to Job 451 based on the job€™s direct labor used to date.
Instructions:
Enter overhead on the job cost sheet but do not make a journal entry at this time.
h. Recorded the total direct and indirect materials costs as reported on all the requisitions for the month.
Instructions:
Prepare a journal entry to record these costs and post it to general ledger accounts.
i. Recorded the total direct and indirect labor costs as reported on all time tickets for the month.
Instructions:
Prepare a journal entry to record these costs and post it to general ledger accounts.
j. Recorded the total overhead costs applied to jobs.
Instructions:
Prepare a journal entry to record the allocation of these overhead costs and post it to general ledgeraccounts.