Complete the journal entries for the period below, making sure to refer to the provided
beginning trial balance/chart of accounts for the listing of account names used by the business.
Make sure to complete the job cost sheets below as you work through the journal entries to
ensure all costs of each job are appropriately accumulated during the period.

Note: Job #107 is the only job in Work in Process Inventory on 12/1/21.

Finished Goods Inventory consists of what is left of Job #106.

A blank job cost sheet is attached for Job #108, a job you will begin this period.

#1 - Received $49,000 from customers paying on their accounts from sales made during the past
accounting period.

#2 – On December 1, raw materials were purchased on account from Smith Co. for $213,500.

#3 - Requisitioned raw materials from the warehouse for Job #107 – Total $62,000.

#4 – On 12/16 a partial payment of $113,500 was made on the materials purchased in transaction
#2 and a 90-day, 5% note payable for the balance was issued.

#5 - Requisitioned raw materials from the warehouse for Job #108 – Total $75,500

#6 - Direct labor for the month was used as follows:
Job #107 -- $76,000
Job #108 -- $91,000
The direct labor employees were paid in cash (no withholdings).

#7 - Paid $63,800 for indirect labor. (No withholdings.)

#8 - Other indirect costs of production were $47,500 for the period, with half paid in cash and
half placed on account.

#9 - Paid administrative salaries for the month of $15,500 and sales salaries of $7,500. (No
withholdings.)

#10 - Received and paid the utility bill of $2,400. The company determined that $1,800 related
to the factory and $600 to selling and administrative activities.

#11 - Estimated property taxes for the month at $400. Allocate $250 to the factory and $150 to
selling and administrative activities.

#12 - Prepare the entry to accrue interest on the note to Smith Company on 12/31.

#13 - Prepare adjusting entries for depreciation for one month. Use straight-line depreciation
and no salvage value (refer to the chart of accounts/trial balance for the historical cost of each).
Factory Building 40-year life
Factory Machinery 15-year life
Office Building 30-year life
Office Equipment 10-year life

#14 - Factory overhead is applied to production at 75% of direct labor dollars.

#15 - Job #107 is complete and ready for sale. Prepare the necessary entry to transfer the cost of
the job.

#16 - The remainder of Job #106 and 1,200 units of Job #107 are sold for cash of $271,300.
Prepare the necessary entry (or entries).

#17 - If there is any over or underapplied manufacturing overhead, close the amount into Cost of
Goods Sold.

Job Cost Sheet
Job Order No. 106

Units: 2,715
Direct Materials: $39,500
Direct Labor$55,000

Overhead: $41,250
Cost Summary
Direct materials $39,500

Cost per unit $50.00 (135,750/2,715)
Direct labor 55,000

Units sold: 2000
Overhead _ 41,250___ Units remaining 715
Total ____$135,750_____

Fill Out Job Cost Sheets for Job 107 and 108 Job 6 is already filled out

Job Order No. 107 Units 1,600

Direct Materials: 5,400

Direct Labor: 6,400

Applied Overhead: 4,800

Job Order No. 108 Units 3,275

Direct Materials:

Direct Labor:

Applied Overhead:

Step #2 – Answer the following questions regarding the company’s production during the current
accounting period.

1. During the period the company purchased $213,500 of raw materials. How much, in dollars,
of raw materials were used in production during the current period?

2. Give one reason why a company would use a predetermined overhead application rate rather
than apply the actual amount of factory overhead incurred?

3. You were asked to close the over or underapplied overhead into the cost of goods sold.
Explain another way to dispose of the under or overapplied overhead.

Lab #2 - Chapter 12
Quickbooks Import Chart of Accounts

Account Name	Debit	Credit
Cash	87,840
Accounts Receivable	184,000
Manufacturing Overhead	-
Raw Materials Inventory	12,500
Work in Process Inventory	16,600
Finished Goods Inventory	35,750
Land	64,000
Factory Building	675,000
Factory Machinery	180,000
Office Building	270,000
Office Equipment	48,000
Accumulated Depreciation		351,900
Accounts Payable		82,000
Notes Payable		-
Property Taxes Payable		-
Interest Payable		-
Common Stock $10 Par Value		700,000
APIC		275,000
Retained Earnings		164,790
Sales Revenue		-
Selling and Administrative Expenses	-
Cost of Goods Sold	-
Interest Expense	-
Total	1,573,690	1,573,690

Job Order Problem

#13 - Prepare adjusting entries for depreciation for one month. Use straight-line depreciation

and no salvage value

Factory Building 40-year life

Factory Machinery 15-year life

Office Building 30-year life

Office Equipment 10-year life

#14 - Factory overhead is applied to production at 75% of direct labor dollars.

#15 - Job #107 is complete and ready for sale. Prepare the necessary entry to transfer the cost of

the job.

#16 - The remainder of Job #106 and 1,200 units of Job #107 are sold for cash of $271,300.

#17 - If there is any over or underapplied manufacturing overhead, close the amount into Cost of Goods Sold.

1. During the period the company purchased $213,500 of raw materials. How much, in dollars, of raw materials were used in production during the current period?

Step #3 – Create a Statement of the Cost of Goods Manufactured and Sold for this company for the period.