$7-20.$ Assigning Costs to Jobs

The following transactions occurred in January at Tarnsdale Fabricators, a manufacturer of

custom tools:

Purchased $$17,000$ of materials.

Issued $$16,800$ in direct materials to the production department.

Issued $$1,200$ of supplies from the materials inventory.

Paid for the materials purchased in transaction $(1).$

Returned $$2,200$ of the materials issued to production in $(2)$ to the material inventory,

Direct labor employees earned $$31,000,$ which was paid in cash.

Paid $$17,200$ for miscellaneous items for the manufacturing plant. Accounts Payable was

credited.

Recognized depreciation on manufacturing plant of $$35,000.$

Applied manufacturing overhead for the month.

Tarnsdale uses normal costing. It applies overhead on the basis of direct labor costs using

an annual, predetermined rate. At the beginning of the year, management estimated that direct

labor costs for the year would be $$434,000.$ Estimated overhead for the year was $$403,620.$

The following balances appeared in the inventory accounts of Tarnsdale Fabricators for

January:

Required

Prepare T$-$accounts to show the flow of costs during the period from Materials Inventory

through Cost of Goods Sold.