Service CostingJournal Entries Following are transactions for Michael Custodial, Inc. Assume the companys beginning work-in-process services account
Question:
Service Costing—Journal Entries Following are transactions for Michael Custodial, Inc. Assume the company’s beginning work-in-process services account balance is zero.
a. Purchased supplies costing $8,000 for cash.
b. Received and immediately paid a utility bill, $600.
c. Used supplies costing $4,500 in doing work for a customer.
d. Incurred and paid 3,500 hours of direct labor and 1,700 hours of indirect labor. The average hourly wage rate for both direct and indirect labor is $8.
e. Made monthly rent payment, $4,000.
f. Applied overhead at $5.50 per direct labor hour.
g. Michael bills its customers at a rate of $24 per direct labor hour. All work in process was moved to Cost of Services.
h. Closed all under- or overapplied overhead to Cost of Services.
Required:
Prepare the journal entries for the above transactions.
Step by Step Answer:
Accounting Concepts And Applications
ISBN: 9780324376159
10th Edition
Authors: W. Steve Albrecht, James D. Stice, Earl K. Stice, Monte R. Swain