Job Cost Journal Entries Prior to the beginning of 2016, Lowe Company estimated that it would incur $88,000 of manufacturing overhead cost during 2016, using 8,000 direct labor hours to produce the desired volume of goods On January 1,2016, beginning balances of Materials Inventory, Work in Process Inventory, and Finished Goods Inventory were $14,000, $ 0 , and $21,500, respectively Required Prepare general journal entries to record the following for 2016 a Purchased materials on account, $19,500 Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer b Of the total dollar value of materials used, $15,500 represented direct material and $5,500 indirect material Description Debit Credit Work in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer c Determined total factory labor, $67,500 (7,500 hrs $9 hr ) d Of the factory labor, 80 was direct and 20 indirect Description Debit Credit Work in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer e Applied manufacturing overhead based on direct labor hours to work in process Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer f Determined actual manufacturing overhead other than those items already recorded, $46,000 (Credit Accounts Payable ) Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer Accounts payable Answer Answer g Ending inventories of work in process and finished goods were $16,000 and $28,500, respectively Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory) Make separate entries Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer Work in process inventory Answer Answer Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer Finished goods inventory Answer Answer h Transferred the balance in Manufacturing Overhead to Cost of Goods Sold Description Debit Credit AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory Answer Answer

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Job Cost Journal Entries Prior to the beginning of 2016, Lowe Company estimated that it would incur $88,000 of manufacturing overhead cost during 2016, using

Job Cost Journal Entries

Prior to the beginning of 2016, Lowe Company estimated that it would incur $88,000 of manufacturing overhead cost during 2016, using 8,000 direct labor hours to produce the desired volume of goods. On January 1,2016, beginning balances of Materials Inventory, Work in Process Inventory, and Finished Goods Inventory were $14,000, $-0-, and $21,500, respectively.

Required

Prepare general journal entries to record the following for 2016.

a. Purchased materials on account, $19,500.

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer

b. Of the total dollar value of materials used, $15,500 represented direct material and $5,500 indirect material.

Description	Debit	Credit
Work in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer

c. Determined total factory labor, $67,500 (7,500 hrs. @ $9/hr.).

d. Of the factory labor, 80% was direct and 20% indirect.

Description	Debit	Credit
Work in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer

e. Applied manufacturing overhead based on direct labor hours to work in process.

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer

f. Determined actual manufacturing overhead other than those items already recorded, $46,000. (Credit Accounts Payable.)

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
Accounts payable	Answer	Answer

g. Ending inventories of work in process and finished goods were $16,000 and $28,500, respectively. Determine the cost of finished goods (credit WIP) and the cost of goods sold (credit FG inventory). Make separate entries.

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
Work in process inventory	Answer	Answer

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
Finished goods inventory	Answer	Answer

h. Transferred the balance in Manufacturing Overhead to Cost of Goods Sold.

Description	Debit	Credit
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer
AnswerAccounts payableCost of goods soldFinished goods inventoryManufacturing overheadMaterials inventoryWages payableWork in process inventory	Answer	Answer