Answered step by step
Verified Expert Solution
Question
1 Approved Answer
BIG PROBLEM Bills Roll Again Inc.! (Here forward known as Bills), led by their CEO, Allen Joshers is a manufacturer of jet engines. Bills uses
BIG PROBLEM Bills Roll Again Inc.! (Here forward known as "Bills"), led by their CEO, Allen Joshers is a manufacturer of jet engines. Bills uses a job order costing system. Beginning balances at 1/1/23 were as follows: Raw materials $95,000 Work in process $70,000 Finished goods $25,000. Cash $15,000 The company applies overhead using a predetermined overhead rate based on machine hours. At the beginning of the year, they estimated that it works 25,280 machine hours and incur $455,040 in manufacturing overhead. Estimated direct labor for the year was $250,000. The following transactions were recorded for 2023 . a) Raw Materials purchased $200,000. b) Raw Materials were requisitioned into production in the amount of $180,000,90% of this was direct components like titanium and steel, the other 10% were for indirect supplies which was impractical to trace like screws, lubricants, misc. indirect supplies c) The following employee costs were incurred during 2023, labor in the assembly plant $230,000, factory janitor $30,000, factory manager 50,000 , administrative salaries $90,000. d) Promotional expense incurred $18,000. e) Factory utilities $25,000, corporate headquarters utilities $10,000 f) Fire insurance on Factory for policy period 1/1/24 thru 12/31/24=$140,000 g) Depreciation for the year, using the double declining basis was $60,000 for the office and $300,000 for of factory. h) Manufacturing overhead was applied to jobs. Bills actual machine hour activity for 2023 turned out to be 23,400 hours. This was less than the 25,280 as predicted in the beginning of the year. i) Goods completed and transferred to finished goods were $700,000. j) Phones were sold for $875,000 that per the job costs sheets cost 650,000 k) Close out misapplied overhead (if any) as applicable to COGS l) Bills collected all its accounts receivable. m) Bills paid off all salaries payable and 90% of accounts payable (round to nearest dollar). Prepare appropriate journal entries for a thru m above; assume transactions a thru ! are recorded on account. Post activity to T accounts. (They apply overhead to jobs based on actual machine hours) Prepare income statement in good form period ended 12.31.23. How much cash do they have at 12/31/23
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started