Lowder Inc. builds custom conveyor systems for warehouses and distribution centers. During the month of July, the following occurred:

Jul.	1	Purchased materials on account for $42,630.
	2	Requisitioned materials totaling $27,000 for use in production: $12,500 for Job 703 and the remainder for Job 704.
	28	Recorded direct labor payroll for the month of $26,320 with an average wage of $14 per hour. Job 703 required 780 direct labor hours; Job 704 required 1,100 direct labor hours.
	28	Incurred and paid actual overhead of $19,950.
	28	Charged overhead to production at the rate of $10 per direct labor hour.
	30	Completed Job 703 and transferred it to Finished Goods.
	31	Kept Job 704, which was started during July, in process at the end of the month.
	31	Sold Job 700, which had been completed in May, on account for cost plus 30%.

Beginning balances as of July 1 were:

Raw Materials	$6,070
Work in Process (for Job 703)	10,000
Finished Goods (for Job 700)	6,240

	Required:
1.	Prepare the journal entries for July 1 through 28.
2.	Prepare simple job-order cost sheets for Jobs 703 and 704.
3.	Prepare the journal entries for events on July 30 and 31.
4.	Calculate the ending balances of the following: (a) Raw Materials, (b) Work in Process, and (c) Finished Goods.

CHART OF ACCOUNTS

Lowder Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Supplies
132	Prepaid Insurance
141	Raw Materials
142	Work In Process
143	Overhead Control
144	Finished Goods
170	Land
180	Building
181	Accumulated Depreciation

	LIABILITIES
210	Accounts Payable
220	Wages Payable
230	Utilities Payable
240	Lease Payable
250	Other Payable

	EQUITY
310	Common Stock
320	Retained Earnings

	REVENUE
410	Sales

Refer to the list below for the exact wording of text items within your job-order cost sheets.

Amount Descriptions
Beginning balance
Direct labor
Direct materials
Overhead applied
Total

1. Prepare the journal entries for July 1 through 28 on page 10. Refer to the Chart of Accounts for the exact wording of account titles.

PAGE 10

GENERAL JOURNAL

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10

3. Prepare the journal entries for events on July 30 and 31 on page 11 after completing the job-order cost sheets in Requirement 2. Refer to the Chart of Accounts for the exact wording of account titles.

PAGE 11

GENERAL JOURNAL

	DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

2. Prepare simple job-order cost sheets for Jobs 703 and 704. Refer to the list of Amount Descriptions for the exact wording of text items within your job-order cost sheets. All amount cells must have an entry; enter zeros as needed. (Note: Dont forget to complete the journal entries in Requirement 3 afterwards.)

Job-Order Cost Sheets

1		Job 703	Job 704
2	Beginning balance
3
4
5
6

4. Calculate the ending balances of the following:

(a) Raw Materials

(b) Work in Process

(c) Finished Goods