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 $50,000 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 Job 27 Highlands Mall Job 33 Pine Ridge Estates Materials and equipment $ 17,475 $ 53,900 Direct labor 14,900 26,950 Overhead (applied) 4,470 8,085 Overhead has been applied at 30 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 $ 4,400 $ 6,200 $ 6,000 $ 4,300 Direct labor (wages payable) 5,900 8,150 7,300 3,000 Other May Events Received $13,900 payment on Job 24 delivered to customer in April Purchased materials and equipment for $10,800 on account Billed Pine Ridge Estates $144,000 and received payment for $135,000 of that amount Determined that payroll for indirect labor personnel totaled $790 Issued supplies and incidental materials for current jobs costing $295 Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation) Property taxes $ 690 Storage area rental 815 Truck and delivery cost 460 Advertising and promotion campaign 740 Inspections 340 Telephone and other miscellaneous 465 Equipment depreciation 590 Required a 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 ) 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 Materials and equipment inventory Work in process Inventory

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 15, 2024

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

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 $50,000. 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:

	Job 27 Highlands Mall		Job 33 Pine Ridge Estates
Materials and equipment	$	17,475	$	53,900
Direct labor		14,900		26,950
Overhead (applied)		4,470		8,085

Overhead has been applied at 30 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	$	4,400	$	6,200	$	6,000	$	4,300
Direct labor (wages payable)		5,900		8,150		7,300		3,000

Other May Events

Received $13,900 payment on Job 24 delivered to customer in April.
Purchased materials and equipment for $10,800 on account.
Billed Pine Ridge Estates $144,000 and received payment for $135,000 of that amount.
Determined that payroll for indirect labor personnel totaled $790.
Issued supplies and incidental materials for current jobs costing $295.
Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation):


Property taxes	$	690
Storage area rental		815
Truck and delivery cost		460
Advertising and promotion campaign		740
Inspections		340
Telephone and other miscellaneous		465
Equipment depreciation		590

Required:

a. 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.)

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.