P2-27y mOly. 2,3, 4) comprehensive accounting for manufacturing transactions [90-120 min] Sneeches' Stars produces stars for elementary teachers to reward their students. Sneeches' Stars trial balance on April 1 follows: SNEECHES STARS Trial Balance April 1, 2010 Balance Credit Debit s 18,000 170,000 Accoant Title Cash Accounts receivable 5,300 41,300 21,300 250,000 Materials Work in process Finished goods Plaint assets Accumulated Accounts payable Wages payable Common stock Retained carnings Sales revenue Cost of goods sold Manufacturing wages 68,000 129,000 2,800 140,000 166,100 Marketing and general expensces $505,900505,900 April 1 balances in the subsidiary ledgers were as follows: Materials subledger: Paper, $4,800, indirect materials, $500 Work in progress subledger, Job 120, $41,300 Finished goods subledger: Large Stars, $9,300, Small Stars, $12,000 April transactions are summarized as follows: a. Collections on account, $149,000 b. Marketing and general expenses incurred and paid, $25,000 c Payments on account, $38,000 d. Materials purchases on credit: Paper, $24,500; indirect materials, $4,600 e. Materials used in production (requisitionedk . Job 120 paper, $750 * Job 121: paper, $7,800 . Indirect materials, $2,000 f. Manufacturing wages incurred during April, $38,000, of which $36,000 was paid. g. Labor time records for the month: Job 120, $4,000; Job 121, $18,000, indirect h. Depreciation on plant and equipment, $2,.400 Wages payable at March 31 were paid during April, $2,800 labor, $16,000 L Manufacturing overhead was allocated at the predetermined rate of 70% of direct i. Jobs completed during the month: Job 120, 400,000 Large Stars ar tortal cos k. Credit sales on account: all of Job 120 for $110,000 labor cost of $48,850 L. Closed the Manufacturing overhead accouns to Cost of goods sold Job Order Costing Requirements 3 1. Open T-accounts for the general ledger, the Materials ledger, the Work in process ledger, and the Finished goods ledger. Insert each account balance as given, and use the reference Bal. ences. Sneeches uses a perpetual inventory system. 3. Prepare a trial balance at April 30. 4. Use the Work in process T-account to prepare a schedule of cost of goods manu- factured for the month of April. (You may want to review Exhibit 1-10.) 5. Prepare an income statement for the month of April. To calculate cost of goods sold, you may want to review Exhibit 1-7. (Hint: In transaction I you closed any under/overallocated manufacturing overhead to Cost of goods sold. In the income statement, show this correction as an adjustment to Cost of goods sold. If manufacturing overhead is underallocated, the adjustment will increase Cost of goods sold. If overhead is overallocated, the adjustment will decrease Cost of goods sold.)
