P17-36B Accounting for transactions, construction company

Meadow Construction, Inc. is a home builder in Arizona. Meadow uses a job order costing system in which each house is a job. Because it constructs houses, the company uses an account titled Construction Overhead. The company applies overhead based on estimated direct labor costs. For the year, it estimated construction overhead of $1,150,000 and total direct labor costs of $5,750,000. The following events occurred during August:

1. Purchased materials on account, $450,000.
2. Requisitioned direct materials and used direct labor in construction. Recorded the materials requisitioned.

House 402

House 403

House 404

House 405

Direct Materials Direct Labor

$ 52,000

67,000

63,000

88,000

$ 47,000

36,000

54,000

52,000

1. The company incurred total wages of $240,000. Use the data from Item b to assign the wages. Wages are not yet paid.
2. Depreciation of construction equipment, $6,300.
3. Other overhead costs incurred: Equipment rentals paid in cash, $40,000; Worker liability insurance expired, $5,000.
4. Allocated overhead to jobs.
5. Houses completed: 402, 404.
6. House sold on account: 404 for $250.000.

save it as A4YourName, and submit it by the due date. Assignment solutions will be provided right after the dt date. Turn in assignment on time to earn bonus points. Handwritten assignment and late assignment will earn points. P1730A is similar and its solution is available in the Cl 17 folder. P17.36B Accounting for transactions, construction company Meadow Coostuction, Inc in a hoenc beilder in Arixona. Meales ass a pob ender costing system in which each house is a joh Because ir cosseructs boules, the company uses an accuunt nitkel Construction Onerhead. The enerpany apples orcrhead based on extimated direct labor costs. For the yar, ir estimatnd construction onerhead of 51,150,000 and toal dineer labor cosss of 55,7500N. The folouing cvens occurred daring August: a. Purchased materials on accoanc, 5450000 . b. Requivitioned direct materials and uned direct labor in consuruction. Recunted the materials requisitioned. c. The company incurred total wages of $240,000, Vse the das foum lam b to assign the wages. Wages are not yet paial. d. Depreciaion of construction equipencat, $6,300. c. Other ewerhed conb incurned: Equipesent rentals paid in cesh, swamo, Woelier liatility insunance eqpired, $5,000. f. Allocated owerhead to jobs g. Houses completed: 402,404. h. House sold on accoune 404 for $250,000. Requirements 1. Calculate Meadowls prodeternined ovcthead allocation tate for the jear. 2. Prepare joumal entries to recond the events in the jenenl jicurnal. 3. Open T-accounts for Work in-Process Inventory and Finibal Coods lnwestory: Post the appropriste entries to these accoants, identiffing each enery by keere. Detemioe the ending account balanecs, asauning that the boginning balinces were aces. 4. Add the costs of the unfinished houmes, and show thut this moel amwint ey als the ending balance in the Work-in-Process Inventrory ancount. 5. Add the cost of the completed boase that has net yet been nold and shes that this equaks the ending balance in Finished Goods leventory. 6. Compute griss profit on the house that was sold. What enses must gous profit coner for Mleatow Construction