All journal entries have been recorded correctly. However on journal C the credit info is incorrect. It is either cash nor accounts payable. what would the credit entry be?
Given this info, is the manufacturing overhead underapplied or overapplied for the year?
record the above journal entry
prepare an income statement
Problem 3-16 Comprehensive Problem (LO3-1, LO3-2, LO3-4) Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales. The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $92,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows: Raw materials Work in process Finished goods $ 10,400 $ 4,600 $ 8,400 During the year, the following transactions were completed: a. Raw materials purchased on account, $ 165,000. b. Raw materials used in production, $142,000 (materials costing $126,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor Indirect labor Sales commissions Administrative salaries 5 169,000 $ 316,500 $ 22,000 $ 41,000 d. Rent for the year was $18,500 ($13,500 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $13,000. f. Advertising costs incurred, $13,000. g. Depreciation recorded on equipment, $20,000. ($16,000 of this amount related to equipment used in factory operations, the remaining $4,000 related to equipment used in selling and administrative activities.) h. Record the manufacturing overhead cost applied to jobs. 1. Goods that had cost $227,000 to manufacture according to their job cost sheets were completed. J. Sales for the year (all paid in cash) totaled $511,000. The total cost to manufacture these goods according to their job cost sheets was $217,000. Required: 1. Prepare journal entries to record the transactions for the year. 2. Prepare T-accounts for each inventory account Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). 3A. Is Manufacturing Overhead underapplied or overapplied for the year? 3. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. 4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared. Journal entry worksheet Cost for employee services incurred as follows: Direct labor $169,000 Indirect labor $316,900 Sales commissions $22,000 Administrative salaries $41,000 Note: Enter debits before credits. Transaction Credit General Journal Manufacturing overhead Sales commisions expense Administrative salaries expense Work in process Debit 316,900 22,000 41,000 169,000 548,900 T-accounts (don't forget to enter the beginning balances in your inventory accounts). (Do not round intermediate calculations.) Beg Bal Raw Materials 10,400 165,000 Beg Ba 142,000 Work in Process 4,600 126,000 227,000 169,000 388.7007 End. Bal 33,400 End Bal 461,300 Manufacturing Overhead Beg Bal Finished Goods 8,400 227,000 217,000 Beg Bal. 388,700 h 16,000 316.900 13,500 13,000 16,000 End Bal 18.400 Cost of Goods Sold End Bal 13 300 Beg Bal. 217,000 End. Bal 217,000 Journal entry worksheet Record the entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. Note: Enter debits before credits. Transaction General Journal Debit Credit Gold Nest Company Income Statement For the Year Ended Selling and administrative expenses
