LO3 Job Order Costing:T Account Analysis P2. Par Carts, Inc., produces special-order golf carts, so Par Carts uses a job order costing system. Overhead is applied at the rate of 90 percent of direct labor cost. The following is a list of transactions for January: Jan. 1 Purchased direct materials on account, $215,400. 2 Purchased indirect materials on account, $49,500. 4 Requested direct materials costing $193,200 (all used on Job X) and indirect materials costing $38,100 for production. 10 Paid the following overhead costs: utilities, $4,400; manufactur- ing rent, $3,800; and maintenance charges, $3,900. 15 Recorded the following gross wages and salaries for employees: direct labor, $120,000 (all for Job X); indirect labor, S60,620. 15 Applied overhead to production. 19 Purchased indirect materials costing S27,550 and direct materials costing $190,450 on account. 21 Requested direct materials costing $214,750 (Job X, $178,170; Job Y, $18, 170; and Job Z, S18,410) and indirect materials cost- ing S31,400 for production. 910 CHAPTER 20 Costing Systems: Job Order Costing Jan. 31 Recorded the following gross wages and salaries for employees: direct labor, $132,000 (Job X, $118,500; Job Y, S7,000; Job Z, $6,500); indirect labor, $62,240. 31 Applied overhead to production. 31 Completed and transferred Job X (375 carts) and Job Y (10 carts) to finished goods inventory; total cost was $855,990. 31 Shipped Job X to the customer; total production cost was $824,520 and sales price was $996,800. 31 Recorded these overhead costs adjusting entries): prepaid insur- ance expired, $3,700; property taxes (payable at year end), $3,400; and depreciation-machinery, $15,500. Required 1. Record the entries for all transactions in January using T accounts for the following: Materials Inventory, Work in Process Inventory, Finished Goods Inventory, Overhead, Cash, Accounts Receivable, Prepaid Insurance, Accu mulated Depreciation-Machinery, Accounts Payable, Payroll Payable, Prop. erty Taxes Payable, Sales, and Cost of Goods Sold. Use job order cost cards for Job X, Job Y, and Job Z. Determine the partial account balances. Assume no beginning inventory balances. Also assume that when the payroll was recorded, entries were made to the Payroll Payable account. 2. Compute the amount of underapplied or overapplied overhead as of January 31 and transfer it to the Cost of Goods Sold account. 3. Why should the Overhead account's underapplied or overapplied overhead be transferred to the Cost of Goods Sold account? apter 20, P 2. (Continued) Job Order: Y JOB ORDER COST CARD Par Carts, Inc. Customer: Job Y Batch: Custom: X Specifications: Golf Carts per Customer Specs Date of Order: 1/21/xx Date of Completion: 1/31/xx Previous Months Current Month Cost Summary Costs Charged to Job Direct materials Direct labor Overhead (90% of direct labor costs) Total cost Units completed Product unit cost apter 20, P 2. (Continued Job Order: Z JOB ORDER COST CARD Customer: Par Carts, Inc. Job Z Specifications: Golf Carts per Customer Specs Batch: Custom: X Date of Order: 1/21/xx Date of Completion: Costs Charged to Job Previous Current Cost Direct materials Months Month Summary Direct labor Overhead (90% of direct labor costs) Total cost Units completed Product unit cost Ch20 P2 (4) cer 20, P 2. (Continued) Underapplied or overapplied overhead computed. overhead incurred Overhead applied Underapplied overhead 260 Overhead 1/15 1/31 1/4 1/10 1/15 1/21 1/31 1/31 1/31 End. Bal. Cost of Goods Sold 1/31 1/31 End. Bal