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 $37,000. 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 Job 33 Highlands Mall Pine Ridge Estates Materials and equipment $15,525 $ 52,600 Direct labor 13,600 26,300 Overhead (applied 5,440 10,520 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 Materials and equipment Direct labor (wages payable) 27 33 $3,100 $4,900 4,600 6,850 34 $4,700 6,000 35 $3,000 1,700 Other May Events 1. Received $12,600 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $9.500 on account 3. Billed Pine Ridge Estates $131,000 and received payment for $80,000 of that amount 4. Determined that payroll for indirect labor personnel totaled $660. 5. Issued supplies and incidental materials for current jobs costing $165. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation), Other May Events 1. Received $12,600 payment on Job 24 delivered to customer in April, 2. Purchased materials and equipment for $9,500 on account. 3. Billed Pine Ridge Estates $131,000 and received payment for $80,000 of that amount. 4. Determined that payroll for indirect labor personnel totaled $660. 5. Issued supplies and incidental materials for current jobs costing $165. 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 $560 685 330 610 210 335 460 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.)
