For the year ended December 31, 2020, the job cost sheets of Cinta Company contained the following data.

Other data:1. Raw materials inventory totaled $15,000 on January 1. During the year, $140,000 of raw materials were purchased on account.

2. Finished goods on January 1 consisted of Job No. 7638 for $87,000 and Job No. 7639 for $92,000.

3. Job No. 7640 and Job No. 7641 were completed during the year.

4. Job Nos. 7638, 7639, and 7641 were sold on account for $530,000.

5. Manufacturing overhead incurred on account totaled $120,000.

6. Other manufacturing overhead consisted of indirect materials $14,000, indirect labor $18,000, and depreciation on factory machinery $8,000.

Instructions

a. Prove the agreement of Work in Process Inventory with job cost sheets pertaining to unfinished work. Use a single T-account for Work in Process Inventory. Calculate each of the following, then post each to the T-account:

(1) Beginning balance.

(2) Direct materials.?

(3) Direct labor.

(4) Manufacturing overhead.

(5) Completed jobs.

b. Prepare the adjusting entry for manufacturing overhead, assuming the balance is allocated entirely to Cost of Goods Sold.

c. Determine the gross profit to be reported for 2020.

Transcribed Image Text:

Explanation Direct Materials Manufacturing Overhead Job Number Direct Total Labor Costs 7640 Balance 1/1 $25,000 $24,000 $28,800 77,800 Current year's 30,000 36,000 43,200 109,200 costs Balance 1/1 7641 11,000 18,000 21,600 50,600| Current year's 43,000 48,000 57,600 148,600| costs 7642 58,000 Current year's 55,000 66,000 179,000 costs