Frank Thompson operates a small business that manufactures oversized backyard games. He runs the business as a sole proprietorship. The company uses a job order cost system using a first$-$in$,$ first$-$out $($FIFO$)$ inventory system. He purchases the materials that will be needed and then as customers place orders they cut the materials and assemble the games as specified in the order. He keeps some completed games on hand to sell to customers as well.

As they purchase the materials they record them as an asset in an account called materials. They might be direct, or they might be indirect. As they need the materials they will either get debited to the Work in Process account $($an asset, direct materials related to a specific job$)$ or to Factory Overhead $($indirect materials, related to all jobs$).$ When jobs are completed, all costs related to them $($direct materials, direct labor, applied factory overhead$)$ will be combined to determine the total cost for the job and will be moved from the Work in Process account to Finished Goods $($also an asset$).$ Factory Overhead will be applied at $40\%$ of Direct Material costs. When told to record the sale, you will record two entries $$ one for the sale at retail and one for the cost in the goods.

Costs for any jobs in process on December $31$ have been recorded on the job cost records. As new costs are incurred for those jobs or for any new jobs you will be required to update the appropriate job cost records for the specified jobs. These records will allow you to accumulate all costs related to each job to determine the total cost for that job.

To help in the manufacturing process Frank has two employees who work on the production of the games. These wages are considered direct costs to the jobs. Plus, he has one employee that helps do the accounting work. That job is not related to production and is treated as a period cost. He pays all employees at the end of the month. Federal Income Tax is withheld at $15\%$ for all employees. FICA Tax is withheld at $7\mathrm{.}65\%($combines both Social Security and Medicare$).$ At this point the company does not have a retirement plan or insurance plan set up for its employees.

We will be journalizing the transactions for the company for the month of January $2021.$ Provided for your reference is a Trial Balance dated January $1,2021($beginning of this period, end of the previous period$),$ a schedule of accounts receivable showing who owes us money and how much they owe us$.$ A schedule of accounts payable showing who we owe money to and how much. The general ledger with the beginning balances filled in$.$ And the necessary job cost record sheets.What to do: Journalize each transaction located in the "Transaction"

tab at the bottom of the excel file in the general journal. Remember only

use proper accounts names $($use the chart of accounts tab to help you find

the available account names$)$ and each transaction must have total debits

equal to total credits.

As you journalize you also need to record any entry affecting accounts

receivable or accounts payable in their subsidiaries. We learned this in

chapter $5.$ Also, if you affect a specific job $($you will be given a job

number$)$ you need to record that in the job cost records in addition to

recording it in the general journal.

Once you have journalized all of the transactions you need to post from

the general journal into the general ledger. In the ledger you would use

$J1,J2,J3$ etc. for the post reference number showing which journal and

page number you got the information. Then you go back to the journal

and fill in the account number from the ledger where you posted it$.$

Finally, prepare an unadjusted trial balance.

Things to think about as you work the set:

As you begin working on the practice set it is important to remember the

basic concepts we learned in ACCT $200$ and also the new concepts from

chapters $14$ and $15.$

If you are told that you are doing something relating to just the current

month in the nonmanufacturing part of the business, you would look for a

current asset or an expense account.

If you are told to do something that relates to the manufacture of the