1 P6 A 2 Ref fx B C D E F J K ACCOUNTS DEBIT CREDIT M N 0 P Q R S T U V 3 A 4 The company issued 100,000 shares of common stock for $1.00 per share. 5 CASH 100,000 6 COMMON STOCK JOB 101 JOB 102 JOB 103 DM 4,000 DM 7,000 DM 5,000 DL 9,000 MO 7,200 100,000 TOTAL 20,200 DL MO TOTAL 6,000 DL 5,000 4,800 MO 4,000 17,800 TOTAL 14,000 7 B 8 9 The company purchased $20,000 of raw materials on account. RAW MATERIALS 20,000 10 ACCOUNTS PAYABLE 20,000 CASH A 100,000 11 C ACCOUNTS PAYABLE COMMON STOCK 20,000 B 17,000 E 100,000 A 12 13 Raw materials: allocated $4,000 to job 101, $7,000 to job 102, & $5,000 to job 103. Enter these values on the job cost sheets. 14 WORK IN PROCESS 16,000 15 RAW MATERIALS 16 D 16,000 H ACCOUNTS RECEIVABLE 40,400 SALARIES PAYABLE RETAINED EARNINGS 20,000 D 17 18 Direct Labor for each job: Job 101: $9,000; Job 102: $6,000; Job 103: $5,000. Enter these values on the job cost sheets. 19 WORK IN PROCESS 20,000 20 SALARIES PAYABLE 20,000 21 E 22 B RAW MATERIALS 20,000 DIVIDENDS 16,000 C 23 24 25 Actual manufacturing overhead incurred and accrued as a payable was $14,000 plus $3,000 of Accumulted depreciation. (Do not record on job sheets) MANUF. OVERHEAD 17,000 26 ACCOUNTS PAYABLE 17,000 27 F 28 29 30 Manufacturing Overhead is applied at a rate of 80% of direct labor cost. (80% of $20,000 is $16,000). Apply at the same rate on each job cost sheet. WORK IN PROCESS 16,000 31 MANUF. OVERHEAD WORK IN PROCESS DM C DL D MO applied F 16,000 20,000 16,000 38,000 G 16,000 SALES 40,400 H 32 G 33 Jobs 101 and 102 were finished and moved to Finished Goods. EQUIPMENT COST OF GOODS SOLD 34 FINISHED GOODS 38,000 35 WORK IN PROCESS 36 H 38,000 FINISHED GOODS G 38,000 20,200 1 20,200 1,000 37 38 Job 101 was sold to a customer. The price is set at twice the cost of the job. ACCOUNTS RECEIVABLE 40,400 39 SALES 40,400 ACC. DEPR. EQ. 40 41 The cost of job 101 is moved to Cost of Goods Sold. 42 COST OF GOODS SOLD 20,200 43 FINISHED GOODS E 20,200 MANUFACTURING OVERHEAD 17,000 16,000 F 44 J 45 46 47 did not accurately predict the actual amount of overhead incurred. 48 Note that the Manufacturing Overhead has an ending debit balance of $1,000. This is because the Predetermined Overhead Rate of 80% of direct labor cost At the end of the year, this balance in the MO account must be closed to COGS. Y Z