Journal Entries, T-Accounts

Lowder Inc. builds custom conveyor systems for warehouses and distribution centres. During the month of July, the following occurred:

1. Purchased materials on account for $117,360.
2. Requisitioned materials totalling $47,600 for use in production: $19,700 for Job 703 and the remainder for Job 704.
3. Recorded direct labour payroll for the month of $39,480 with an average wage of $21 per hour. Job 703 required 620 direct labour hours; Job 704 required 1,260 direct labour hours.
4. Incurred and paid actual overhead of $37,650.
5. Charged overhead to production at the rate of $18 per direct labour hour.
6. Completed Job 703 and transferred it to Finished Goods.
7. Kept Job 704, which was started during July, in process at the end of the month.
8. Sold Job 700, which had been completed in May, on account for cost plus 30 percent.

Beginning balances as at July 1 were:

Raw Materials	$ 9,652
Work in Process (for Job 703)	12,850
Finished Goods (for Job 700)	16,845

Required:

1. Prepare the journal entries for events (a) through (e).

a.
	To record purchase of materials in July
b.
	To record requisition of materials for July
c.
	To record direct labour payroll for July
d.
e.

2. Prepare a simple job-order cost sheet for Job 703.

Lowder Inc.
Job Order Cost Sheet
Job 703
July 1 balance	$
Materials
Direct labour
Overhead
Total	$

Prepare a simple job-order cost sheet for Job 704. If your answer is zero, enter "0".

Lowder Inc.
Job Order Cost Sheet
Job 704
July 1 balance	$
Materials
Direct labour
Overhead
Total	$

3. Prepare the journal entries for events (f) and (h). Round your answers to two decimal places, if necessary.

f.
	To record completion of Job 703
h. Sale
	To record sale of Job 700
Cost
	To record costs of Job 700 as cost of goods sold

4. Calculate the ending balances of the following: (a) Raw Materials, (b) Work in Process, and (c) Finished Goods.

Raw Materials	$
Work in Process	$
Finished Goods	$