1. Journal Entries, T-Accounts, Cost of Goods Manufactured and Sold

   During May, the following transactions were completed and reported by Jerico Company:

   1. Materials purchased on account, $60,100.
   2. Materials issued to production to fill job-order requisitions: direct materials, $50,000; indirect materials, $8,700.
   3. Payroll for the month: direct labor, $75,000; indirect labor, $35,000; administrative, $28,000; sales, $19,000.
   4. Depreciation on factory plant and equipment, $10,400.
   5. Property taxes on the factory accrued during the month, $1,450.
   6. Insurance on the factory expired with a credit to the prepaid insurance account, $6,200.
   7. Factory utilities, $5,500.
   8. Advertising paid with cash, $7,900.
   9. Depreciation on office equipment, $800; on sales vehicles, $1,650.
   10. Legal fees incurred but not yet paid for preparation of lease agreements, $750.
   11. 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.
   12. 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

   Required:

   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.

   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.

   3. Prepare a statement of cost of goods manufactured.

   		$
   	$
   	$
   Cost of goods manufactured		$

   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

   • Increases
   • Decreases
   by $