Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold During May, the following transactions were completed and reported by Jerico Company: a. Materials purchased on account, $60,200. b. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,700. c. Payroll for the month: direct labor, $75,000; indirect labor, $35,000; administrative, $28,000; sales, $19,000. d. Depreciation on factory plant and equipment, $10,400. e. Property taxes on the factory accrued during the month, $1,450. f. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200. g. Factory utilities, $5,500. h. Advertising paid with cash, $7,900. i. Depreciation on office equipment, $800; on sales vehicles, $1,680. j. Legal fees incurred but not yet paid for preparation of lease agreements, $750. k. Overhead is charged to production at a rate of $18 per direct labor hour. Records show 4,000 direct labor hours were worked during the month. 1. Cost of jobs completed during the month, $160,000. The company also reported the following beginning balances in its inventory accounts: Materials Inventory $7,500 Work-in-Process Inventory 37,000 Finished Goods Inventory 50,000 1. Prepare journal entries to record the transactions occurring in May. For a compound transaction, if an amount box does not require an entry, leave it blank. 60,200 a. Materials Accounts Payable 60,200 b. Work in Process 50,000 Overhead Control 8,700 Materials 58,700 C. Work in Process 75,000 Overhead Control 35,000 28,000 Administrative Expense 19,000 Selling Expense Wages Payable 157,000 10,400 d. Overhead Control Accumulated Depreciation 10,400 e. Overhead Control 1,450 Property Taxes Payable 1,450 6,200 f. Overhead Control Prepaid Insurance 6,200 g. Overhead Control 5,500 Utilities Payable 5,500 7,900 h. Selling Expense Cash 7,900 i. 800 Administrative Expense Selling Expense 1,680 Accumulated Depreciation 2,480 j. Administrative Expense 750 Accounts Payable 750 72,000 k. Work in Process Overhead Control 72,000 I. Finished Goods 160,000 Work in Process 160,000 2. Prepare T-accounts for Materials Inventory, Overhead Control, Work-in-Process Inventory, and Finished Goods Inventory. Post the entries to the T-account in the same order in which they were journalized. Materials Inventory Balance 50,000 x 7,500 b) 60,200 (a) Balance 67,700 x Feedback Check My Work Set up T-accounts and consider the information that pertains to Overhead Control, Work-in-Process, Materials, and Finished Goods account. The use of T-accounts would provide a good picture of balances and tra normal balance of the accounts. What is the increasing side? The decreasing side? This will be helpful when posting the journalized transactions. Balance 160,000 Work in Process Inventory 37,000 (0) 50,000 75,000 (b) (c) (k) 72,000 Balance 74,000 Feedback Check My Work Set up T-accounts and consider the information that pertains to Overhead Control, Work-in-process, Materials, and Finished Goods account. The use of T-accounts would provide a good picture of balances and tra normal balance of the accounts. What is the increasing side? The decreasing side? This will be helpful when posting the journalized transactions. Finished Goods Inventory Balance 50,000 (0) 160,000 Balance 210,000 Feedback Overhead Control (b) 50,000 X (k) 72,000 (c) 157,000 x (d) 10,400 x (e) 1,450 (f) 6,200 (g) 5,500 Balance 3450 Feedback Check My Work Set up T-accounts and consider the information that pertains to Overhead Control, Work-in-process, Materia normal balance of the accounts. What is the increasing side? The decreasing side? This will be helpful when 3. Prepare a statement of cost of goods manufactured. Jerico Company Statement of Cost of Goods Manufactured For the Month Ended May 31, 20XX Direct materials 5,000 x Direct labor 75,000 Overhead: Supplies 8,800 Indirect labor 36,000 X Depreciation, plant, and equipment 10,500 x x x x Property taxes 14,500 Utilities, factory 6,200 X Insurance 5,500 Add: Overapplied overhead 3,550 X Overhead applied 72,000 Manufacturing costs added $ 197,000 Add: Beginning work in process 37,000 Less: Ending work in process -74,000 Cost of goods manufactured 160,000 4. If the overhead variance is all allocated to cost of goods sold, by how much will cost of goods sold decrease or increase? Decreases by $ 3,550