Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $45,000. The Work-in-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Materials and equipment Direct labor Overhead (applied) Job 27 Job 33 Highlands Mall Pine Ridge Estates $16,725 $53,400 14,400 26,700 5,760 10,680 Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 34 35 Materials and equipment $3,900 $5,700 $5,500 $3,800 Direct labor (wages payable) 5,400 7,650 2,500 6,800 Other May Events 1. Received $13,400 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $10,300 on account. 3. Billed Pine Ridge Estates $139,000 and received payment for $120,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $740. 5. Issued supplies and incidental materials for current jobs costing $245. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes $640 Other May Events 1. Received $13,400 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $10,300 on account. 3. Billed Pine Ridge Estates $139,000 and received payment for $120,000 of that amount 4. Determined that payroll for indirect labor personnel totaled $740. 5. Issued supplies and incidental materials for current jobs costing $245. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes Storage area rental Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation $640 765 410 690 290 415 540 Required: a. Prepare journal entries to record the flow of costs for operations during May. b. Calculate the amount of over- or underapplied overhead for the month c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Complete this question by entering your answers in the tabs below. Required A Required B Required Prepare journal entries to record the flow of costs for operations during May. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1. 13,400 Cash Accounts receivable 13,400 B 02 10,300 Materials and equipment inventory Accounts payable 10,300 139,000 Accounts receivable Sales revenue 139,000 D b 120,000 Cash Accounts receivable 120,000 E 294 740 Manufacturing overhead Wages payable 740 F 05 245 Manufacturing overhead Materials and equipment inventory 245 G 06 3,210 690 Manufacturing overhead Selling costs-Advertising Cash Accumulated depreciation 3,360 540 Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation 410 690 290 415 540 Required: a. Prepare journal entries to record the flow of costs for operations during May. b. Calculate the amount of over- or underapplied overhead for the month. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the amount of over- or underapplied overhead for the month. Truck and delivery cost Advertising and promotion campaign Inspections Telephone and other miscellaneous Equipment depreciation 410 690 290 415 540 Required: a. Prepare journal entries to record the flow of costs for operations during May. b. Calculate the amount of over- or underapplied overhead for the month. c. Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine inventory balances for Materials and Equipment Inventory and Work-in-process inventory. Materials and equipment inventory Work-in-process inventory
