Question
Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to
Maria Young is the sole stockholder of Purl of Great Price Company (POGP Company), which produces high-end knitted sweaters and sweater vests for sale to retail outlets. The company started in January of the current year, and employs three knitters (each of whom work 40 hours per week) and one office manager/knitting supervisor (this employee works 20 hours per week as office manager, and 20 hours per week as knitting supervisor). All wages are paid in cash at the end of each month.
Each knitter has a knitting machine that is used about 2/3 of the knitters time, the rest of the knitters time being involved in hand knitting and piecing together the garments. The company also has a packaging machine used to wrap the garments in plastic for shipping, which is operated by the office manager/knitting supervisor approximately 5 hours per week.
The knitting machines were purchased on January 1 of the current year, and cost $2,400 each, with an anticipated useful life of 10 years and no salvage value. The packaging machine was purchased on the same date and cost $4,800, with the same anticipated useful life and salvage value.
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1. | Review the data in the Predetermined Factory Overhead Rate panel, and compute the predetermined factory overhead rate for POGP Company. | ||||||||||||
2. | On December 10, POGP Company receives an order for 200 sweater vests and assigns Job 83 to the order. Review the Materials Requisition panel.
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3. | On December 15, review the source documents on the Time Tickets panel.
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4. | On December 21, Job 62 is completed. Review the Job Cost Sheets panel and your journal entries. Journalize the entry to move the associated costs to the Finished Goods account.* | ||||||||||||
5. | On December 22, 75 of the 100 sweaters from Job 62 are sold on account for $125 each. Journalize the following transactions*:
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6. | On December 31, the last work day of the year for the knitters, review the source documents on the Time Tickets panel.
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7. | On December 31, journalize the following transactions*. Note that expenses (B), (C), and (D) were paid in cash.
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8. | On December 31, prepare the journal entry to dispose of the balance in the Factory Overhead account.* | ||||||||||||
9. | What are the balances in the following accounts as of December 31?
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CHART OF ACCOUNTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
POGP Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Materials Requisition Materials Requisition Req. No. 12255 Description Yam type B Date: Dec. 10 Job No. 83 Qty. Issued Unit Price 600 skeins $5.00 Amount S3,000 Total issued S3,000 Materials Requisition Materials Requisition Req. No. 12255 Description Yam type B Date: Dec. 10 Job No. 83 Qty. Issued Unit Price 600 skeins $5.00 Amount S3,000 Total issued S3,000
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