• Journalize the entries for the month of January in the General Journal. When using the Work in Process account, be sure to post to the appropriate Job Cost Record.
• Be sure to use proper entry technique. Debit accounts and amounts to the left of indented Credit accounts and amounts to the right.
• Also, all debits should be entered first in an entry followed by credits.

Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a sub- sequent similar transaction. Jan. 2 Paid Lancaster Advertising Agency $645.22 for preparing advertisements in local news- papers Jan. 2 Paid Palomar Properties $3,660.00 for Janu- ary rent. Of this amount, 30% is for office facilities and 70% is for factory facilities. Jan. 3 Received a check from Lowlands Corpora- tion for the amount due within the discount period. Jan. 3 Paid Norway Wood Products Company 9.214.75 in payment of January 1 balance. Jan. 4 Paid State National Bank $27,412.00 for December payroll taxes payable as follows: Employees' Income Tax Payable, $16,800.00; FICA Tax Payable, $10,612.00. Jan. 4. Paid Samantha Plastics Company $11,341.27 in payment of the January 1 balance. Jan. 4 Applied $3,521.00 of direct materials (Req- uisition No. 238) and $8,220.00 of direct labor (Time Ticket No. 129) to Job No. 351, which will complete the job. The FICA rate is 7.65% of gross pay, and the employees income tax rate is 18% of gross pay, When preparing the entry for applying direct labor, debit Work in Process for the gross pay and credit Employees Income Tax Payable and FICA Tax Payable for the appropriate amounts and Salaries Payable for net pay, Remember that employees are paid on the last day of each month. Applied factory overhead to Job No. 351 is based upon 120% of direct labor cost. Trans- ferred the completed job to the Finished Goods account Jan. 5 Sold and shipped Job No. 351 to the appro- priate customer. All sales are on account 1/10, net 30 days, FOB shipping point. Dynamic Designs Inc. maintains a perpetual inventory system. Each time a sale is made to a customer, you must debit Cost of Goods Sold and credit Finished Goods for the cost of the job. Jan. 8 Requisitioned $5,891.00 of direct materials and factory supplies to be used in the manu- facture of all jobs currently in process. Jan. 9 Paid Roberto David, County Treasurer, $9,421.00 for property taxes accrued as of December 31. Jan. 9 Accepted a job for the manufacture of 17 booth units for Bloomfield Engineering, Began the job today by applying $6,320.00 of direct materials to Job No. 354 (Direct Materials Requisition No. 240). Jan. 9 Purchased from Caster Container Corpora- tion $2.177.63 of indirect factory supplies. credit terms net 15 days. Jan. 10 Received a check from Sunlit Insiders Cor: poration for the amount due within the dis- count period. Jan. 11 Applied $4.790.00 of direct materials to Job No. 350 (Direct Materials Requisition No. 241). Jan. 12 Received a check from Sensational Sales Company for the amount due after the dis- count period has expired. Jan. 15 Applied $1,479.14 of direct materials to Job No. 352 (Direct Materials Requisition No. 242). Jan. 16 Applied $3,247.06 of direct labor to Job No. 353, which will complete the job (Time Ticket No. 130). Applied factory overhead using the appro- Transferred the completed job to the Finished priate rate. Goods account. Transferred the completed job to the Finished Jan. 29 Sold and shipped Job No. 356 to the appro- Goods account priate customer. Refer to the Job Cost Record Jan. 17 Requisitioned $522.91 of indirect materials for the total cost of the job for billing pur- and factory supplies to be used in all factory poses. jobs currently in process. Jan. 29 Paid Edison Tool Company the amount due Jan. 17 Signed a contract with National Interiors for in payment of the January 1 balance the manufacture of 120 display cases. Began Jan. 29 Received a check from Reep Contractors Inc. the job today by applying $3,000.00 of direct for the amount due after the discount period materials to Job No. 355 (Direct Materials has expired. Requisition No. 243). Jan. 29 Paid post office $500.00 for postage added to Jan, 17 Purchased $1,131.90 of factory supplies from postage meter. Expense this amount Parker Sundries Inc. and paid cash. Jan. 29 Paid Warden Advertising Company S1,150.00 Jan. 17 Paid the sales manager of Dynamic Designs for designing ads for local newspapers. Inc. $124.20 for customer entertaining Jan. 29 Paid Allied Power and Light Company Jan. 18 Received a report from the treasurer that $3.259.40 for heat, power, and light. Allocate Myerson Contractors, one of our customers, 25% of this amount to Electricity Expense has declared bankruptcy. Wrote off the bal- and 75% to Factory Overhead. ance owed to Dynamic Designs Inc. by Jan 31 Applied S1,000.00 of direct labor to Job Myerson Contractors No. 352 (Time Ticket No. 133) Jan. 18 Sold and shipped Job No. 353 to the appro- priate customer. Refer to the Job Cost Record Applied factory overhead using the appro. for the total cost of the job to determine the priate rate. This job will not be completed until February selling price Jan. 22 Purchased $9.790.00 of direct materials from Jan. 31 Applied S7,880.00 of direct labor to Job Paradise Supply Company, credit terms net No. 355 (Time Ticket No. 134), 30 days. Applied factory overhead using the appro- Jan. 22 Accepted a job for the manufacture of 7 oven priate rate. This job will not be completed vent shrouds for Milburn Designers, Began until March the job today by applying $2,624.19 of direct Jan. 31 Applied $1.160.00 of direct labor to Job materials to Job No. 356 (Direct Materials No. 354 (Time Ticket No. 135). Requisition No. 244) Applied factory overhead using the appro- Jan. 24 Paid Caster Container Corporation the amount priate rate. This job will not be completed due today from the January 9 purchase. until February Jan. 25 Applied $8.880,00 of direct labor to Job Jan. 31 Received the following data on the monthly No 350, which will complete the job (Time payroll from the payroll clerk: Ticket No. 131) Direct labor (already recorded). $33,387.06 Applied factory overhead using the appro- New payroll data (to be recorded priate rate Indirect. S12.123.10 Transferred the completed job to the Finished Superintendent's salary 4,100.00 Goods account Sales salaries 13.122.78 Jan. 26 Sold and shipped Job No. 350 to the appro- Officers' salaries 10,322.22 priate customer. Refer to the Job Cost Record Office salaries... for the total cost of the job to determine the 8.929.40 selling price. Record the monthly payroll in the General Journal. Remember that direct labor payroll Jan. 26 Applied $3,200.00 of direct labor to Job already has been recorded as it was incurred No. 356, which will complete the job (Time in January. Salaries for indirect labor are Ticket No. 132) recorded only at the end of the month. Debit Applied factory overhead using the appro- Factory Overhead for indirect labor and the priate rate superintendent's salary, debit other salary expense accounts for the appropriate amounts Jan. 31 Office supplies inventory as of credit FICA Tax Payable for 7.65% of gross January 31 S1.800.00 pay, credit Employees' Income Tax Payable for 18% of gross pay, and credit Salaries Pay- Jan. 31 Depreciation for the month: able for the net pay Factory equipment $3,280.70 Record the payroll taxes imposed on the Office equipment 369.70 employer for all personnel for the month of Jan. 31 Amortization of patents for Janu- January ary (debit Factory Overhead). $295.00 All payroll taxes relating to factory personnel Jan. 31 Amortization of organization are debited to Factory Overhead; all payroll 95.00 taxes related to nonfactory personnel are costs for January debited to Payroll Taxes Expense - General Jan. 31 Property tax accrued for the month: The FICA tax is 7.65% of gross pay, state Factory 51.185.00 unemployment tax is 5,4% of gross pay, and General 137.26 federal unemployment tax is 0.8% of gross pay. Since this is the first month in the current Jan. 31 Close out underapplied Factory Overhead of year, no employee has reached the ceiling $112.50 to Cost of Goods Sold on the payroll taxes (calculation difference due Jan. 31 Based on past experience. Dynamic Designs to rounding of 50.01). Inc. estimates that $2.350.00 is a reasonable Jan. 31 Received a check from Smart Kitchen Con- balance for the January 31 balance in Allow- tractors for the amount due after the discount ance for Doubtful Accounts. period has expired. Jan. 31 Income tax is based on 30% of income before Jan. 31 Received a check from Rugby Builders for tax. Accrue income tax owed by debiting the amount due after the discount period has Income Tax Expense and crediting Income expired Tux Payable for $2,282.26 Jan. 31 Paid all employees for wages eared in Janu Prepare all reports at this point. If you are using a ary computerized system, print your journal entries and Jan 31 Purchased $14,741.00 of direct materials on general ledger NOW) account from Sanders Hardware Inc Closing Entries (Take a trial balance at this point.) Jan. 31 Prepare closing entries to close revenue and Adjusting Entries expense accounts to Income Summary and transfer niet income to Retained Earnings Jan 31 Insurance expired during January is acknowledged that this step is not per- Factory formed until year end; this is for instructional S1.114.00 Selling 71.25 purposes only.) Prepare a Post-Closing Trial Balance General 258.60 Note: Certain transactions, such as those dealing with payroll, require detailed computational work before preparing the journal entry. These transactions are explained initially in the narrative as they occur. Please refer to the original transaction when preparing a sub- sequent similar transaction. Jan. 2 Paid Lancaster Advertising Agency $645.22 for preparing advertisements in local news- papers Jan. 2 Paid Palomar Properties $3,660.00 for Janu- ary rent. Of this amount, 30% is for office facilities and 70% is for factory facilities. Jan. 3 Received a check from Lowlands Corpora- tion for the amount due within the discount period. Jan. 3 Paid Norway Wood Products Company 9.214.75 in payment of January 1 balance. Jan. 4 Paid State National Bank $27,412.00 for December payroll taxes payable as follows: Employees' Income Tax Payable, $16,800.00; FICA Tax Payable, $10,612.00. Jan. 4. Paid Samantha Plastics Company $11,341.27 in payment of the January 1 balance. Jan. 4 Applied $3,521.00 of direct materials (Req- uisition No. 238) and $8,220.00 of direct labor (Time Ticket No. 129) to Job No. 351, which will complete the job. The FICA rate is 7.65% of gross pay, and the employees income tax rate is 18% of gross pay, When preparing the entry for applying direct labor, debit Work in Process for the gross pay and credit Employees Income Tax Payable and FICA Tax Payable for the appropriate amounts and Salaries Payable for net pay, Remember that employees are paid on the last day of each month. Applied factory overhead to Job No. 351 is based upon 120% of direct labor cost. Trans- ferred the completed job to the Finished Goods account Jan. 5 Sold and shipped Job No. 351 to the appro- priate customer. All sales are on account 1/10, net 30 days, FOB shipping point. Dynamic Designs Inc. maintains a perpetual inventory system. Each time a sale is made to a customer, you must debit Cost of Goods Sold and credit Finished Goods for the cost of the job. Jan. 8 Requisitioned $5,891.00 of direct materials and factory supplies to be used in the manu- facture of all jobs currently in process. Jan. 9 Paid Roberto David, County Treasurer, $9,421.00 for property taxes accrued as of December 31. Jan. 9 Accepted a job for the manufacture of 17 booth units for Bloomfield Engineering, Began the job today by applying $6,320.00 of direct materials to Job No. 354 (Direct Materials Requisition No. 240). Jan. 9 Purchased from Caster Container Corpora- tion $2.177.63 of indirect factory supplies. credit terms net 15 days. Jan. 10 Received a check from Sunlit Insiders Cor: poration for the amount due within the dis- count period. Jan. 11 Applied $4.790.00 of direct materials to Job No. 350 (Direct Materials Requisition No. 241). Jan. 12 Received a check from Sensational Sales Company for the amount due after the dis- count period has expired. Jan. 15 Applied $1,479.14 of direct materials to Job No. 352 (Direct Materials Requisition No. 242). Jan. 16 Applied $3,247.06 of direct labor to Job No. 353, which will complete the job (Time Ticket No. 130). Applied factory overhead using the appro- Transferred the completed job to the Finished priate rate. Goods account. Transferred the completed job to the Finished Jan. 29 Sold and shipped Job No. 356 to the appro- Goods account priate customer. Refer to the Job Cost Record Jan. 17 Requisitioned $522.91 of indirect materials for the total cost of the job for billing pur- and factory supplies to be used in all factory poses. jobs currently in process. Jan. 29 Paid Edison Tool Company the amount due Jan. 17 Signed a contract with National Interiors for in payment of the January 1 balance the manufacture of 120 display cases. Began Jan. 29 Received a check from Reep Contractors Inc. the job today by applying $3,000.00 of direct for the amount due after the discount period materials to Job No. 355 (Direct Materials has expired. Requisition No. 243). Jan. 29 Paid post office $500.00 for postage added to Jan, 17 Purchased $1,131.90 of factory supplies from postage meter. Expense this amount Parker Sundries Inc. and paid cash. Jan. 29 Paid Warden Advertising Company S1,150.00 Jan. 17 Paid the sales manager of Dynamic Designs for designing ads for local newspapers. Inc. $124.20 for customer entertaining Jan. 29 Paid Allied Power and Light Company Jan. 18 Received a report from the treasurer that $3.259.40 for heat, power, and light. Allocate Myerson Contractors, one of our customers, 25% of this amount to Electricity Expense has declared bankruptcy. Wrote off the bal- and 75% to Factory Overhead. ance owed to Dynamic Designs Inc. by Jan 31 Applied S1,000.00 of direct labor to Job Myerson Contractors No. 352 (Time Ticket No. 133) Jan. 18 Sold and shipped Job No. 353 to the appro- priate customer. Refer to the Job Cost Record Applied factory overhead using the appro. for the total cost of the job to determine the priate rate. This job will not be completed until February selling price Jan. 22 Purchased $9.790.00 of direct materials from Jan. 31 Applied S7,880.00 of direct labor to Job Paradise Supply Company, credit terms net No. 355 (Time Ticket No. 134), 30 days. Applied factory overhead using the appro- Jan. 22 Accepted a job for the manufacture of 7 oven priate rate. This job will not be completed vent shrouds for Milburn Designers, Began until March the job today by applying $2,624.19 of direct Jan. 31 Applied $1.160.00 of direct labor to Job materials to Job No. 356 (Direct Materials No. 354 (Time Ticket No. 135). Requisition No. 244) Applied factory overhead using the appro- Jan. 24 Paid Caster Container Corporation the amount priate rate. This job will not be completed due today from the January 9 purchase. until February Jan. 25 Applied $8.880,00 of direct labor to Job Jan. 31 Received the following data on the monthly No 350, which will complete the job (Time payroll from the payroll clerk: Ticket No. 131) Direct labor (already recorded). $33,387.06 Applied factory overhead using the appro- New payroll data (to be recorded priate rate Indirect. S12.123.10 Transferred the completed job to the Finished Superintendent's salary 4,100.00 Goods account Sales salaries 13.122.78 Jan. 26 Sold and shipped Job No. 350 to the appro- Officers' salaries 10,322.22 priate customer. Refer to the Job Cost Record Office salaries... for the total cost of the job to determine the 8.929.40 selling price. Record the monthly payroll in the General Journal. Remember that direct labor payroll Jan. 26 Applied $3,200.00 of direct labor to Job already has been recorded as it was incurred No. 356, which will complete the job (Time in January. Salaries for indirect labor are Ticket No. 132) recorded only at the end of the month. Debit Applied factory overhead using the appro- Factory Overhead for indirect labor and the priate rate superintendent's salary, debit other salary expense accounts for the appropriate amounts Jan. 31 Office supplies inventory as of credit FICA Tax Payable for 7.65% of gross January 31 S1.800.00 pay, credit Employees' Income Tax Payable for 18% of gross pay, and credit Salaries Pay- Jan. 31 Depreciation for the month: able for the net pay Factory equipment $3,280.70 Record the payroll taxes imposed on the Office equipment 369.70 employer for all personnel for the month of Jan. 31 Amortization of patents for Janu- January ary (debit Factory Overhead). $295.00 All payroll taxes relating to factory personnel Jan. 31 Amortization of organization are debited to Factory Overhead; all payroll 95.00 taxes related to nonfactory personnel are costs for January debited to Payroll Taxes Expense - General Jan. 31 Property tax accrued for the month: The FICA tax is 7.65% of gross pay, state Factory 51.185.00 unemployment tax is 5,4% of gross pay, and General 137.26 federal unemployment tax is 0.8% of gross pay. Since this is the first month in the current Jan. 31 Close out underapplied Factory Overhead of year, no employee has reached the ceiling $112.50 to Cost of Goods Sold on the payroll taxes (calculation difference due Jan. 31 Based on past experience. Dynamic Designs to rounding of 50.01). Inc. estimates that $2.350.00 is a reasonable Jan. 31 Received a check from Smart Kitchen Con- balance for the January 31 balance in Allow- tractors for the amount due after the discount ance for Doubtful Accounts. period has expired. Jan. 31 Income tax is based on 30% of income before Jan. 31 Received a check from Rugby Builders for tax. Accrue income tax owed by debiting the amount due after the discount period has Income Tax Expense and crediting Income expired Tux Payable for $2,282.26 Jan. 31 Paid all employees for wages eared in Janu Prepare all reports at this point. If you are using a ary computerized system, print your journal entries and Jan 31 Purchased $14,741.00 of direct materials on general ledger NOW) account from Sanders Hardware Inc Closing Entries (Take a trial balance at this point.) Jan. 31 Prepare closing entries to close revenue and Adjusting Entries expense accounts to Income Summary and transfer niet income to Retained Earnings Jan 31 Insurance expired during January is acknowledged that this step is not per- Factory formed until year end; this is for instructional S1.114.00 Selling 71.25 purposes only.) Prepare a Post-Closing Trial Balance General 258.60