Custom Cabinetry has one job in process (Job 120) as of June 30; at that time, its job cost sheet reports direct materials of $7,500, direct labor of $4,300, and applied overhead of $3,440. Custom Cabinetry applies overhead at the rate of 80% of direct labor cost. During July, Job 120 is sold (on account) for $27,000, Job 121 is started and completed, and Job 122 is started and still in process at the end of the month. Custom Cabinetry incurs the following costs during July.

July Product Costs	Job 120			Job 121			Job 122			Total
Direct materials	$	1,100		$	8,700		$	3,200		$	13,000
Direct labor		3,300			4,600			3,800			11,700
Overhead applied		?			?			?			?

1. Prepare journal entries for the following in July.

1. Direct materials used in production.
2. Direct labor used in production.
3. Overhead applied.
4. The sale of Job 120.
5. Cost of goods sold for Job 120.

2. Compute the July 31 balances of the Work in Process Inventory and the Finished Goods Inventory general ledger accounts. (Assume there are no jobs in Finished Goods Inventory as of June 30.)

• 1 Record the entry to assign direct materials to job.

• 2 Record the entry to assign direct labor to job.

• 3 Record the application of overhead to work in process.

• 4 Record the sale of Job 120 on account.

• 5 Record cost of goods sold for Job 120

No	Transaction	General Journal	Debit	Credit
1	a.	No Transaction Recorded
2	b.	No Transaction Recorded
3	c.	No Transaction Recorded
4	d.	No Transaction Recorded
5	e.	No Transaction Recorded

	Work in Process	Finished Goods
Job #
Direct materials
Direct labor
Overhead
Total cost	$0	$0