Exercise $7\mathrm{.}26($Algo$)$ Assigning Costs to Jobs $($LO $7-1)$

Elmira Tool and Die makes machine tools to order. The following transactions occurred in October:

Issued $$4,700$ of supplies from the materials inventory.

Purchased $$51,500$ of materials.

Issued $$47,100$ in direct materials to the production department

Paid $$45,700$ for miscellaneous items for the manufacturing plant. Accounts Payable was credited.

Retumed $$9,200$ of the materials issued to production in $(3)$ to the materials inventory.

Purchased $$21,500$ of materials on account.

Paid for the materials purchased in transaction $(2)$ $$95,500$

Applied manufacturing overhead for the month.

Elmira uses normal costing. It applies overhead on the basis of materials costs using an annual, predetermined rate. At the beginning

of the year, management estimated that materials costs for the year would be $$538,000.$ Estimated overhead for the year was $$2,205,800.$

$$2,205,800.$

The following balances appeared in the inventory accounts of Elmira Tool and Die for October.

Required:

a$.$ Prepare journal entries to record these transactions.

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