Ervin Equipment, a manufacturer of exercise and workout equipment for sale to institutions, uses job costing. The following transactions occurred in January:

Purchased $84,000 of materials.

Paid $89,000 cash for utilities, power, equipment maintenance, and other miscellaneous items for the manufacturing shop.

Issued $6,900 of supplies from the materials inventory.

Issued $92,000 in direct materials to the production department.

Incurred direct labor costs of $82,000, which were credited to Wages Payable.

Paid for the materials purchased in transaction (1).

Incurred $15,000 in indirect labor costs, which were credited to Wages Payable.

Applied overhead on the basis of 155 percent of direct labor costs.

Recognized depreciation on manufacturing property, plant, and equipment of $19,100.

Returned $1,420 of the materials in transaction (3) to inventory.

Paid the for the wages incurred in transaction (5).

	Beginning	Ending
Materials Inventory	$ 31,500	?
Work-in-Process Inventory	52,000	?
Finished Goods Inventory	182,400	$ 121,000
Cost of Goods Sold		248,800

Required:

Prepare journal entries to record the transactions.

Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Journal entry worksheet

• Required B

Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.

Materials Inventory		Work-in-Process Inventory
Debit	Credit	Debit	Credit
Beginning balance				Beginning balance
							Finished Goods
Ending balance
	Ending balance
Manufacturing Overhead Control	Applied Manufacturing Overhead
Debit	Credit	Debit	Credit
Beginning balance				Beginning balance
				Ending balance
Ending balance
Accounts Payable	Cash
Debit	Credit	Debit	Credit
Beginning balance				Beginning balance
Ending balance				Ending balance
Wages Payable	Accumulated DepreciationProperty, Plant, and Equipment
Debit	Credit	Debit	Credit
Beginning balance				Beginning balance
Ending balance				Ending balance
Finished Goods Inventory	Cost of Goods Sold
Debit	Credit	Debit	Credit
Beginning balance				Beginning balance
Goods completed			Transfer to Cost of Goods Sold	Finished Goods Inventory
Ending balance				Ending balance