Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an
Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.
The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $94,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:
Raw materials: $10,400
Work in process: $4,800
Finished goods: $8,900
During the year, the following transactions were completed:
a. Raw materials purchased on account, $168,000
b. Raw materials used in production, $144,000 (materials costing $123,000 were charged directly to jobs; the remaining materials were indirect).
c. Costs for employee services were incurred as follows:
Direct labor: $154,000
Indirect labor: $245,000
Sales commissions: $20,000
Administrative salaries: $47,000
d. Rent for the year was $18,300 ($13,400 of this amount related to factory operations, and the remainder related to selling and administrative activities).
e. Utility costs incurred in the factory, $15,000
f. Advertising costs incurred, $14,000
g. Depreciation recorded on equipment, $20,000. (16,000 of this amount related to equipment used in factory operations; the remaining $4,000 related to equipment used in selling and administrative activities.)
h. Record the manufacturing overhead cost applied to jobs.
i. Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
j. Sales for the year (all paid in cash) totaled $514,000. The total cost to manufacture these goods according to their job cost sheets was $217,000.
Required:
- make journal entries to record the transactions for the year.
- make T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts).
- Is Manufacturing Overhead underapplied or overapplied for the year?
- Make a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.
- Make an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have made.
"Chrome File Edit View History Bookmarks People Tab Window Help 7 78% Wed Dec 9 10 00 06 PM Q . . . C ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/acti.. ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work 3A. Is Manufacturing Overhead underapplied or overapplied for the year? 3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. 4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared. 25 points Complete this question by entering your answers in the tabs below. eBook Reg 1 Req 2 Req 3A Req 3B Req 4 Print Is Manufacturing Overhead underapplied or overapplied for the year? Overapplied Underapplied Graw Hill Hucation DEC 9"Chrome File Edit View History Bookmarks People Tab Window Help 7 78% Wed Dec 9 10 00 16 PM Q . . . C ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/acti... ACC 121 Capstone Project Saved Help Save & Exit Submit Check my work Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet 25 points No Transaction General Journal Debit Credit Manufacturing overhead 48,600 48,600 eBook Cost of goods sold Print Req 3A Req 4 > Graw Hill Hucation DEC 9"Chrome File Edit View History Bookmarks People Tab Window Help 7 78% Wed Dec 9 10 00 22 PM Q . . . C ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/acti.. ACC 121 Capstone Project Saved Help Save & Exit Submit Check my work Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.) Gold Nest Company Income Statement 25 points For the Year Ended Sales $ 514,000 Cost of goods sold 168,400 eBook Gross margin 345,600 Print Selling and administrative expenses: Sales commissions 20,000 Administrative salaries expense 47,000 Rent expense 1,900 Advertising expense 14,000 Depreciation expense 1.000 89.900 Net operating income $ 255,700 Graw Hill Hucation DEC 9"Chrome File Edit View History Bookmarks People Tab Window Help 7 78% Wed Dec 9 9 59 22 PM Q . . . . ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253%252F%252Fnewconnect.mheducation.com%252F#/acti... ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work Prepare journal entries to record the transactions for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) View transaction list View journal entry worksheet 25 points No Transaction General Journal Debit Credit 1 a Raw materials 168,000 eBook Accounts payable 168,000 Print 2 b. Work in process 123,000 Manufacturing overhead 21,000 Raw materials 144,000 3 Work in process 154,000 Manufacturing overhead 245,000 Sales commisions expense 20,000 Administrative salaries expense 47,000 Accounts payable 466,000 4 d. Manufacturing overhead 13,400 Rent expense 4,900 Accounts payable 18,300 5 e. Manufacturing overhead 15,000 rav DEC 9"Chrome File Edit View History Bookmarks People Tab Window Help 78% Wed Dec 9 9:59:31 PM Q . . . . ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/acti... ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work 5 e . Manufacturing overhead 15,000 Accounts payable 15,000 25 6 f. Advertising expense 14,000 points Accounts payable 14,000 eBook 7 g. Manufacturing overhead 16,000 Print Depreciation expense 4,000 Accumulated depreciation 20,000 8 h. Work in process 261,800 Manufacturing overhead 261,800 i. Finished goods 226,000 Work in process 226,000 10 j(1). Cash 514,000 Sales 614,000 11 i(2) Cost of goods sold 217,000 Finished goods 217,000 DEC 9 O"Chrome File Edit View History Bookmarks People Tab Window Help 7 78% Wed Dec 9 9:59:55 PM Q . . . C ACC-121-0511 2020FA: McGra x McGraw-Hill Education Campu: X Connect X + C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/acti... ACC 121 Capstone Project i Saved Help Save & Exit Submit Check my work Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don't forget to enter the beginning balances in your inventory accounts). (Do not round intermediate calculations.) i........ Raw Materials Work in Process 25 Beg. Bal. 10,400 Beg. Bal. 4,800 points 168,000 123,000 144,000 154,000 eBook 261,800 End. Bal. 34,400 226,000 Print End. Bal. 317,600 Finished Goods Manufacturing Overhead Beg. Bal. 8,900 Beg. Bal. 21,000 226,000 245,000 217,000 13,400 5,000 End. Bal. 17,900 16,000 261,800 Cost of Goods Sold End. Bal. 48,600 Beg. Bal. 217,000 End. Bal. 217,000 Graw Hill DEC 9
