Budenmayer BV is a small machine shop that uses highly skilled labour and a job-costing system (using normal costing). The total debits 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 stock accounts would include beginning stock balances, if any.
The preceding accounts do not include the following:
a. The manufacturing labour costs recapitulation for the 31 December working day: direct manufacturing labour, €5000 and indirect manufacturing labour, €1000.
b. Miscellaneous manufacturing overhead incurred on 30 December and 31 December: €1000.
Additional information
• Manufacturing overhead has been allocated as a percentage of direct manufacturing labour costs through 30 December.
• Direct materials purchased during 2019 were €85,000.
• There were no returns to suppliers.
• Direct manufacturing labour costs during 2019 totalled €150,000, not including the 31 December working day described previously.

Required
1. Calculate the stock (31 December 2018) of Materials Control, Work-in-Progress Control and Finished Goods Control. Show T-accounts.
2. Prepare all adjusting and closing journal entries for the preceding accounts. Assume that all under- or overallocated manufacturing overhead is closed directly to Cost of Goods Sold.
3. Calculate the ending stock (31 December 2019), after adjustments and closing, of Materials Control, Work-in-Progress Control and Finished Goods Control.

Transcribed Image Text:

30 December 2019 Total debits Total credits Materials Control €100 000 €70 000 Work-in-Progress Control Manufacturing Department Overhead Control Finished Goods Control 320 000 305 000 85 000 325 000 300 000 Cost of Goods Sold 300 000 Manufacturing Overhead Allocated 90 000