Company produces gadgets for the coveted small appliance market. The following data reflect activity for the year

2017:

Costs incurred:

Purchases of direct materials (net) on credit $ 120,000 Direct manufacturing labor cost 86,000 Indirect labor 54,400 Depreciation, factory equipment 33,000 Depreciation, office equipment 7,400 Maintenance, factory equipment 20,000 Miscellaneous factory overhead 9,300 Rent, factory building 77,000 Advertising expense 95,000 Sales commissions 34,000

Inventories: January 1, 2017 December 31, 2017 Direct materials $ 9,700 $ 16,000 Work in process 6,900 21,000 Finished goods 63,000 24,000

Virtual

Virtual Co. uses a normal-costing system and allocates overhead to work in process at a rate of $3.00 per direct manufacturing labor dollar. Indirect materials are insignificant so there is no inventory account for indirect materials. Read the requirements

Requirement 1. Prepare journal entries to record the transactions for 2017 including an entry to close out over- or underallocated overhead to cost of goods sold. For each journal entry indicate the source document that would be used to authorize each entry. Also note which subsidiary ledger, if any, should be referenced as backup for the entry. (Record debits first, then credits. Exclude explanations from any journal entries.)

Record the purchase of direct materials $120,000.

Now select the appropriate source documents and subledgers for the purchase of direct materials. (Only complete the necessary answer boxes.)

Record the direct materials used.

Now select the appropriate source documents and subledgers for the direct materials used. (Only complete the necessary answer boxes.)

$86,000Record the direct and indirect labor payable in a single entry,

and

$54,400

respectively.

Now select the appropriate source documents and subledgers for the direct and indirect labor transactions. (Only complete the necessary answer boxes.)

Prepare a consolidated entry to record the depreciation on factory equipment, the maintenance wages on factory equipment, the prepaid factory rent expired and the miscellaneous factory overhead payable.

Now select the appropriate source documents and subledgers for the depreciation on factory equipment, the maintenance wages on factory equipment, the prepaid factory rent expired and the miscellaneous factory overhead transactions. (Only complete the necessary answer boxes.)

Record the manufacturing overhead allocated.

Now select the appropriate source documents and subledgers for the manufacturing overhead allocated transactions. (Only complete the necessary answer boxes.)

Now select the appropriate source documents and subledgers for the cost of goods sold transactions. (Only complete the necessary answer boxes.)Record the cost of goods sold.Now select the appropriate source documents and subledgers for the transfer of completed job transaction. (Only complete the necessary answer boxes.)Record the transfer of completed jobs.

Prepare a consolidated entry to record the depreciation on office equipment, the commissions payable and the advertising payable.

Now select the appropriate source documents and subledgers for the depreciation on office equipment, the commissions and the advertising transactions. (Only complete the necessary answer boxes.)

Dispose of over- or underallocated manufacturing overhead.

Now select the appropriate source documents and subledgers for the over- or underallocated manufacturing overhead transaction. (Only complete the necessary answer boxes.)

Post entries (1) through (9) to the accounts below, then calculate the ending balance in each account. (For accounts with a $0 balance, leave the balance cells blank.)Requirement 2. Post the journal entries to T-accounts for all of the inventories, Cost of Goods Sold, the Manufacturing Overhead Control Account, and the Manufacturing Overhead Allocated Account.

Review the journal entries

LOADING...

from requirement 1.

Materials

Work-in-Process

Manufacturing

Control

Control

Overhead Control

Bal.

9,700

Bal.

6,900

Bal.

Bal.

Bal.

Bal.

Bal.

Bal.

Manufacturing

Overhead Allocated

Finished Goods

Cost of Goods Sold

Bal.

63,000

Bal.

Bal.

Bal.

Bal.

Bal.

Bal.