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Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:
Kurtz Fencing Inc. uses a job order cost system. The following data summarize the operations related to production for March, the first month of operations:
a. Materials purchased on account, $31,250. | |
b. Materials requisitioned and factory labor used: |
Job | Materials | Factory Labor |
301 | $2,910 | $2,680 |
302 | 3,730 | 3,630 |
303 | 2,280 | 1,810 |
304 | 8,430 | 7,110 |
305 | 4,850 | 5,010 |
306 | 3,900 | 3,280 |
For general factory use | 1,050 | 3,920 |
c. Factory overhead costs incurred on account, $5,760. | |
d. Depreciation of machinery and equipment, $2,040. | |
e. The factory overhead rate is $55 per machine hour. Machine hours used: |
Job | Machine Hours |
301 | 27 |
302 | 38 |
303 | 30 |
304 | 72 |
305 | 41 |
306 | 25 |
Total | 233 |
f. Jobs completed: 301, 302, 303 and 305. | |
g. Jobs were shipped and customers were billed as follows: Job 301, $8,390; Job 302, $10,860; Job 303, $15,380. |
Required: | |||
1. | Journalize the entries to record the summarized operations. Record each item (items a-f) as an individual entry on March 31. Record item g as 2 entries. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. | ||
2. | Post the appropriate entries to T accounts for Work in Process and Finished Goods, using the identifying letters as transaction codes. Insert memo account balances as of the end of the month. For grading purposes enter transactions in alphabetical order. Determine the correct ending balance. The ending balance label is provided on the left side of the T account even when the ending balance is a credit. The unused cell on the balance line should be left blank. | ||
3. | Prepare a schedule of unfinished jobs to support the balance in the work in process account.* | ||
4. | Prepare a schedule of completed jobs on hand to support the balance in the finished goods account.*
|
CHART OF ACCOUNTSKurtz Fencing Inc.General Ledger
ASSETS | |
110 | Cash |
121 | Accounts Receivable |
125 | Notes Receivable |
126 | Interest Receivable |
131 | Materials |
132 | Work in Process |
133 | Factory Overhead |
134 | Finished Goods |
141 | Supplies |
142 | Prepaid Insurance |
143 | Prepaid Expenses |
181 | Land |
191 | Machinery and Equipment |
192 | Accumulated Depreciation-Machinery and Equipment |
LIABILITIES | |
210 | Accounts Payable |
221 | Utilities Payable |
231 | Notes Payable |
236 | Interest Payable |
241 | Lease Payable |
251 | Wages Payable |
252 | Consultant Fees Payable |
EQUITY | |
311 | Common Stock |
340 | Retained Earnings |
351 | Dividends |
390 | Income Summary |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
EXPENSES | |
510 | Cost of Goods Sold |
520 | Wages Expense |
531 | Selling Expenses |
532 | Insurance Expense |
533 | Utilities Expense |
534 | Office Supplies Expense |
540 | Administrative Expenses |
561 | Depreciation Expense-Machinery and Equipment |
590 | Miscellaneous Expense |
710 | Interest Expense |
Amount Descriptions | |
Balance of Work in Process, March 31 | |
Finished Goods, March 31 (Job 305) | |
Job No. 301 | |
Job No. 302 | |
Job No. 303 | |
Job No. 304 | |
Job No. 305 | |
Job No. 306 |
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