Overview of general-ledger relationships. Blakely Company is a small machine shop that © @

uses highly skilled labour and a job costing system (using normal costing). The total debits 5 (yerajiocated, $13,800 and credits in certain accounts just before year end are as follows:

All materials purchased are for direct materials. Note that “total debits” in the inventory accounts would include beginning inventory balances, if any.
The preceding accounts do not include the following:

a. The manufacturing labour costs summary for the December 31 working day: direct manufacturing labour, $4,000, and indirect manufacturing labour, $1,010.

b. Miscellaneous manufacturing overhead incurred on December 30 and December 31: $850 total.

ADDITIONAL INFORMATION @ Manufacturing overhead has been allocated as a percentage of direct manufacturing labour costs through December 30. Job Costing Services @ Direct materials purchased during 2010 were $107,000.

@ There were no returns to suppliers.
@ Direct manufacturing labour costs during 2010 totalled $340,000, not including the December 31 working day described previously.
REQUIRED 1. Compute the inventories (December 31, 2010) of Materials Control, Work-in-Process Control, and Finished Goods Control. Show T-accounts.
2. Prepare all adjusting and closing journal entries for the preceding accounts. Assume that all underallocated or overallocated manufacturing overhead is closed directly to Cost of Goods Sold.LO1

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December 30, 2010 Total Credits Total Debits Materials Control $134,000 $ 91,000 Work-in-Process Control 686,000 683,000 Manufacturing Department Overhead Control 204,500 Finished Goods Control 731,000 690,000 Cost of Goods Sold 690,000 - Manufacturing Overhead Allocated 217,600