Question
Exercise 3-5 (Algo) Journal Entries and T-accounts [LO3-1, LO3-2] The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials
Exercise 3-5 (Algo) Journal Entries and T-accounts [LO3-1, LO3-2]
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
Raw materials purchased on account, $210,000.
Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).
Accrued direct labor cost of $49,000 and indirect labor cost of $22,000.
Depreciation recorded on factory equipment, $105,000.
Other manufacturing overhead costs accrued during October, $129,000.
The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,200 machine-hours were used in October.
Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 40% above cost.
Required: 1. Prepare journal entries to record the transactions given above.
2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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